Due date to remember for Small Businesses for saving interest and penalties

Due date to remember for Small Businesses for saving interest and penalties

Every startup requires a lot of hard work, dedication and patience for starting up their business where a huge investment is made by them. There is a large amount of cost that gets involved in the building up the business and running them successfully. Also, being organized and prepared saves time, money and a little stress.  Thus, to remain hassle free and for their healthy business, every business owners should keep in its mind the “Due Date” i.e. the last date of complying the services like Service tax, TDS, Return Filling, and ROC etc. We as a team of Taxmantra had observed that a numerous query arises regarding due dates and most of the entrepreneurs forget to comply the compliances in right time leading with various interest and penalties. Under mentioned are the due dates of various services. Let us first start with the TDS and its due date:

A. TDS due date:

I.  TDS Payment:

TDS Payment is liable to be made by any assessee monthly who has deducted TDS at the time of incurring any expenditure. The Due Date for TDS Payment is separate for Govt. and Non-Govt. assessee as mentioned below: Due Date for TDS Payment in case of Govt. Assessee:

Particulars Due Date
Tax deposited without challan Same Day
Tax deposited with challan 7th of next month

Due Date for TDS Payment in case of Non Govt. Assessee:

Particulars Due Date
Tax Deductible in other months except March; 7th of next month
Tax Deductible in March 30th April of next year

In case, the assessee fails to deposit the TDS amount within the stipulated time mentioned above, then interest @ 1.5% per month or part of month is charged on the amount of tax from the date on which such tax was deducted to the date on which such tax is actually paid. This means that we never consider any fraction of a month and in case there exist any fraction, it gets rounded off to the nearest multiple and interest gets charged for a full month period. Also, interest is liable to be paid from the date on which the TDS was deducted and not from the date when TDS has become due.

II. TDS Return Filing:

The TDS Return is filed quarterly within the stipulated time. The due date for filing TDS Return is as follows:

Quarter Due Date
April to June 15th July
July to Sept 15th Oct
Oct to Dec 15th Jan
Jan to March 15th May

In case of delay filing of TDS Return, penalty of Rs. 200 per day till the time the default continues from the due date is charged, but should not exceed the total amount of tax deducted. This can be well explained with the help of an example:

  • If TDS is deducted on 05.04.2013 and is deposited on 25.05.2013, then what is the calculation of interest?

According to the TDS provision, default month in payment of TDS is calculated from the Date Deduction of TDS till the Date of Actual Payment of TDS. Therefore, interest shall be charged from 05.04.2013 to 25.05.2013 i.e. 50 days which gets rounded off to 2 months as the provision is for every month or for a part of a month.

  • But, what happens to the calculation of interest, if TDS is deducted on 05.04.2013 and is deposited on 07.05.2013?

In this case, no interest will be charged as we should keep in mind the due date for making the payment of TDS. Every person who has deducted TDS is liable to make the payment of TDS to the government monthly and pay it within 7 days from the end of the month i.e. on or before 7th of the subsequent month. So, here the due date for making the payment of April month TDS is 7th May i.e. the subsequent month of April.

B. Service Tax Due Date:

There are various taxes which are required to be paid on a quarter basis to the government. For example: Provision of service tax gets applied if the total gross turnover exceeds Rs. 10lacs and as per the Service Tax Rules, payment of service tax should be made at regular intervals. The Service Tax collected by the Service Provider shall be paid government before the due date and in case of delayed payment of service tax interest is charged on it @ 18% p.a. or 1.5% per month on day basis. The due date for payment of service tax is separate for Individual/ Partnership Firms and others have been summarized below:

Particulars Frequency

Due Date
Paid Physically Paid Online
Individual/Partnership Quarterly 5th of the FollowingQuarter 6th of the FollowingQuarter
Others Monthly 5th of the FollowingMonth 6th of the FollowingMonth

For Service Tax Return: Every Assessee who has registered for service tax is required to file a service tax return on a half yearly basis.

Period Due Date
April to September 25th October
October to March 25th April

 

 

C. Advance Tax Compliance:

Another measure which is introduced by the Government is the concept of Advance Tax which is applicable only if the total tax liability after reducing the tax deducted at source exceeds Rs. 10000. It is a tax which is paid as the income is earned. Advance Tax Due Dates for Firms, Co-operatives and Local Authorities:

Due Date

Amount of Tax
15th September At least 30% of Tax on total income for the year.
15th December At least 60% of Tax on total income for the year less advance tax already paid.
15th March 100% of Tax on total income for the year less advance tax already paid.

        Advance Tax Due Dates for Companies:

Due Date

Amount of Tax
15th June At least 15% of Tax on total income for the year.
15th September At least 45% of Tax on total income for the year less advance tax already paid.
15th December At least 60% of Tax on total income for the year less advance tax already paid.
15th March 100% of Tax on total income for the year less advance tax already paid.

         

Interest on Late Payment of Advance Tax

In case of late payment of advance tax, interest u/s 234B & 234C is levied as follows:

  • Interest under section 234C – Interest @ 1% per month is payable if the tax is not paid as per the above schedule i.e. for Deferment in Installments of Advance Tax.

 

  • Interest under section 234B – Interest @ 1% is payable if 90% of the tax is not paid before the end of the financial year i.e. for Default in Payment of Advance Tax.

D. Income Tax Return Filing:

After finalizing the books of accounts, an assessee is required to file its return based on the income earned whether from business or salary or income from other sources. As per the provisions of section 139 of the Income Tax Act, 1961, the income tax return should be filed within the due dates. The due dates for filing of returns of income for different category of assessee are given as under:

Particulars Due Date
Corporate Assessee 30th September
Non corporate assessee, (Like Partnership Firm, proprietorship Firm) whose accounts are required to be audited under Income tax Act. 30th September
Any other assessee like Salaried Income, person having Income from House property, Interest income, Business Income where accounts are not required to be audited. 31st July
Corporate Assessee which require to furnish a report u/s 92E of the Income Tax Act, 1961 30th July

          Interest on Late Filing of Income Tax Return Late filing of return will attract interest u/s 234A and i.e. if the assessee fails to file its income tax return within the time prescribed by section 139, the he shall be liable to pay interest @ 1% per month or part of the month from the due date of filing of return to the actual date of filing of its return. However, for the purpose of Income Tax Filings, the year has to close 31st March each year. For that purpose, you only need to file a simple format of Profit & Loss Account and Balance Sheet with the department and then prepare the return and file it within the prescribed due date.

E. ROC Compliances:

Now, what we need to understand is that the ROC compliance and its due dates. ROC Compliances take place after the accounts are approved by the shareholders in Annual General Meeting. The legal compliances of ROC depend on what type of form of organization is selected by an entrepreneur. There are various types of forms available in Ministry of Corporate Affairs which depends on the type of business. Non filing of such forms will attract huge penalty as mentioned by the Companies Act. So, for proper compliances to get followed one should have the knowledge of the due dates. For a newly incorporated company, the due date for the AGM is 18months from the date of incorporation or 9 months from the date of end of financial year, whichever is earlier. Further, a newly incorporated company can extend its financial year up to 15 months from its date of incorporation. The Companies Act, 1956, mandates every company to file their Balance Sheet and Profit and Loss Account along with the audit report within 30 days from Annual General meeting. The company is also required to file annual return containing information such as the name of the company, its registered office, its principal business activities, capital in the company, details of all the directors and shareholders etc. as on the date of Annual General Meeting within 60 days from the date of Annual General Meeting.

Tabular presentation of different form to be filed to comply with annual filing with ROC

Document e-Form Due Date
Balance Sheet Form 23AC 30 days from date of AGM
Profit & Loss Account Form 23ACA 30 days from date of AGM
Annual Return Form 20B to be filed companies having share capital 60 days from date of AGM
Annual Return Form 21A to be filed by companies without share capital 60 days from date of AGM
Compliance Certificate Form 66 to be filed by companies having paid-up capital of Rs.10 lakh to Rs.5 Crore 30 days from date of AGM

For LLP:

Form

Due Date
Form 11 (Balance Sheet & Profit Loss Account) 31st May
Form 8 (Annual Return) 30th Oct

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