Expert Assistance

ITR-6 is the Income Tax Return form prescribed by the Income Tax Department of India specifically for companies. It serves as the comprehensive legal document used by a corporate entity to report its financial performance, calculate its tax liability, and ensure compliance with the Income Tax Act, 1961.

​

Why ITR-6 is Necessary: Applicability and the Mandate

Filing ITR-6 is a statutory requirement that applies to nearly all companies operating in India, with one major exception.

​

Who Must File ITR-6?

The form must be filed by every company as defined under Section 2(17) of the Income Tax Act, 1961. This includes:

• Domestic Companies (e.g., Private Limited, Public Limited, One Person Companies (OPCs)).

• Foreign Companies (Companies incorporated outside India but earning income within India).

• Companies registered under the Companies Act, 2013 or the erstwhile Companies Act, 1956.

 

The Crucial Exception (Who Files ITR-7 Instead)

ITR-6 is not applicable to a company claiming exemption under Section 11.

• Section 11 relates to income derived from property held under trust wholly for charitable or religious purposes.

• Therefore, charitable institutions, religious trusts, and certain non-profit organizations that are registered as companies and claim this exemption must file ITR-7.

​

Why is Filing ITR-6 Mandatory?

Filing ITR-6 is a statutory obligation for all applicable companies to comply with the Indian Income Tax Act. Beyond compliance, it serves several critical functions:

1. Mandatory Compliance: It fulfills the legal requirement for companies to report their annual income, calculate their tax liability, and declare their financial position to the Income Tax Department.

2. Claiming Losses: Timely filing is essential for companies to claim and carry forward business losses to future years. If the return is not filed by the due date, the company loses the right to carry forward most business losses, which would otherwise be adjusted against future profits to reduce the tax burden.

3. Avoiding Penalties: Late filing attracts a penalty of up to ₹10,000 under Section 234F and may also lead to interest charges under Sections 234A, 234B, and 234C, significantly increasing the financial burden.

4. Faster Refunds: Timely submission ensures a quicker processing of the return, which is essential for receiving any eligible tax refunds promptly.

5. Financial Credibility: A consistent and compliant tax history is a prerequisite for financial institutions when companies apply for loans, credit facilities, or other financing, as it demonstrates financial discipline and transparency.

​

The ITR-6 Filing Process

ITR-6 must be filed compulsorily in an electronic mode and is an annexure-less return, meaning no physical documents are attached.

​

1. Preparation and Document Gathering

Before initiating the filing process, the company must have the following documents ready:

• Permanent Account Number (PAN) and Corporate Identification Number (CIN).

• Audited Financial Statements (Balance Sheet, Profit & Loss Account/Manufacturing Account).

• Tax Audit Report (Form 3CD/3CA), if applicable under Section 44AB.

• Details of all Advance Tax and Self-Assessment Tax payments.

• Form 26AS and Tax Deducted at Source (TDS) certificates.

​

2. Digital Filing

• Log in to the Income Tax e-Filing portal using the company’s credentials.

• The form requires filling out information across various sections:

  • Part A: General Information: Basic company details, nature of business, filing status (e.g., original, revised return), and audit information (including the date of the audit report and UDIN).

  • Part A-BS/Part A-PL: Detailed submission of the Balance Sheet and Profit & Loss Account figures.

  • Schedules: Over 40 schedules exist to capture granular details, including:

    • Schedule BP: Computation of Profits and Gains from Business or Profession.

    • Schedule DPM/DOA: Calculation of Depreciation on plant and machinery, and other assets.

    • Schedule CG: Computation of Capital Gains.

    • Schedule CYLA/BFLA/CFL: Adjustments for Current Year Losses, Brought Forward Losses, and losses to be Carried Forward.

    • Schedule MAT: Computation of Minimum Alternate Tax liability under Section 115JB.

    • Schedule VI-A: Claiming various Deductions under Chapter VI-A.

  • Part B: Total Income and Tax Computation: The final calculation of total income and the corresponding tax liability, including adjustments for any Minimum Alternate Tax credit.

​

3. Verification

• The submitted ITR-6 must be digitally verified using the Digital Signature Certificate (DSC) of the person authorised to sign the return (e.g., the Managing Director or other authorized Director). E-verification via Aadhaar OTP is generally not permitted for companies.

• A successful submission generates an Acknowledgement Receipt (ITR-V).

​

Insights for Corporate Taxpayers

​

1. Minimum Alternate Tax (MAT)

All domestic companies, unless specifically exempted (e.g., those opting for the concessional tax regime under Section 115BAA or 115BAB), are required to calculate their tax liability under the regular provisions of the Income Tax Act and also under Minimum Alternate Tax (MAT). The tax payable will be the higher of the two. ITR-6 has specific schedules (Schedule MAT and Schedule MATC) to handle these complex calculations and claim MAT credit where applicable.

​

2. Concessional Tax Regimes

Domestic companies have the option to pay tax at concessional rates under certain sections, provided they forgo specific deductions and exemptions. ITR-6 facilitates the reporting for companies that opt for:

• Section 115BAA (22% tax rate): A company must exercise this option by filing Form 10-IC.

• Section 115BAB (15% tax rate): For new domestic manufacturing companies, exercised by filing Form 10-ID.

​

3. Importance of the Audit Report

If the company is subject to a mandatory tax audit (e.g., turnover exceeds the prescribed limit), the Audit Report in Form 3CD must be submitted electronically by the Chartered Accountant to the Income Tax Department. The ITR-6 filing itself is invalid without the details of this corresponding audit report.

​

4. Continuous Updates

The format and schedules of ITR-6 are often updated annually by the CBDT (Central Board of Direct Taxes) to align with changes in the Finance Act. Corporate taxpayers must ensure they use the correct version for the relevant Assessment Year and incorporate all new reporting requirements, such as disclosures related to MSME payments, or new deduction schemes.