Income Tax Return (ITR) for Businesses
All businesses in India are required to file an Income Tax Return (ITR) every year with the Income Tax Department. It reports the company’s income, expenses, and taxes paid, ensuring legal compliance.
Key Points (Detailed)
Corporate tax rates:
Companies pay tax on their profits as per prescribed rates.
Domestic companies may pay around 22% (new regime) or 25% (for certain small companies), plus surcharge and cess.
New manufacturing companies can avail 15% tax rate (subject to conditions).
Deductions:
Businesses can reduce taxable income by claiming deductions such as:
Depreciation on assets
Business expenses (rent, salaries, utilities)
Eligible deductions under sections like 80C, 80JJAA, etc.
This helps in lowering overall tax liability.
Advance tax:
Businesses must pay tax in installments during the financial year instead of paying all at once at year-end.
Paid in 4 installments (June, September, December, March)
Avoids penalties and interest
Short Exam Definition
Businesses must file ITR annually to report income and taxes, considering corporate tax rates, allowable deductions, and advance tax payments as per Indian tax laws.