By Manu Rao | Updated March 2026
What Is an Income Tax Return?
An Income Tax Return (ITR) is a form filed with the Income Tax Department of India declaring the total income earned, deductions claimed, and taxes paid during a financial year (April 1 to March 31). Every company registered in India must file an ITR — there is no minimum income threshold. Even a company with zero revenue in its first year must file.
Companies file their returns on Form ITR-6. Companies claiming exemption under Section 11 (charitable trusts) use ITR-7. LLPs file ITR-5.
Legal Basis
- Section 139(1) of the Income Tax Act 1961 — Every company must file a return of income before the due date
- Section 139(4) — Belated return can be filed up to December 31 of the assessment year
- Section 139(5) — Revised return to correct errors, also due by December 31 of the AY
- Section 44AB — Tax audit requirement for companies with turnover exceeding specified thresholds
- Section 92E — Transfer pricing report for companies with international transactions
The assessment year (AY) runs from April 1 to March 31 following the financial year. Income earned during FY 2025-26 is assessed in AY 2026-27.
Due Dates for Filing
| Category | Due Date |
|---|---|
| Companies not requiring audit | July 31 of the AY |
| Companies requiring tax audit (Section 44AB) | October 31 of the AY |
| Companies with international transactions requiring TP report | November 30 of the AY |
| Revised return | December 31 of the AY |
| Belated return | December 31 of the AY |
Most foreign-owned companies with a parent abroad will have international transactions, pushing their deadline to November 30. This is a critical distinction — many companies miss it and file late.
How ITR Filing Applies to Foreign-Owned Companies
Indian companies with foreign ownership face specific considerations:
- Transfer pricing documentation — If your Indian company transacts with its foreign parent, sister companies, or any Associated Enterprise (AE) abroad, Section 92 requires arm's length pricing. You must file Form 3CEB (the transfer pricing report) alongside the ITR.
- Foreign tax credits — If the Indian company pays tax abroad (e.g., withholding tax deducted by a foreign client), it can claim credit under Section 90/91 and Rule 128. Form 67 must be filed before the ITR due date.
- DTAA benefits — India has Double Taxation Avoidance Agreements with over 90 countries. The company can claim treaty benefits to avoid double taxation, but only if it files Form 10F and obtains a Tax Residency Certificate.
- MAT credit — Companies paying Minimum Alternate Tax can carry forward the credit for up to 15 years. This must be tracked in the ITR.
- Repatriation of profits — Dividends paid to foreign shareholders are subject to withholding. The ITR must correctly reflect dividend distribution and associated tax withholding under Section 195.
ITR-6 Structure
Form ITR-6, used by companies, has several parts and schedules:
- Part A — General information — CIN, PAN, address, nature of business, date of incorporation
- Part B — Computation of total income — Income from business, capital gains, other sources, brought forward losses
- Schedule BP — Business income computation
- Schedule CG — Capital gains computation
- Schedule OS — Other sources (interest, dividends received)
- Schedule MAT — MAT computation under Section 115JB
- Schedule FA — Foreign assets (if any held by the company)
- Schedule TP — Transfer pricing details
- Schedule ESR — Details of expenditure on scientific research
Filing Process
- Complete the statutory audit and tax audit (if applicable)
- Prepare financial statements under Ind AS or Indian GAAP
- Compute taxable income — Start with book profit, add back disallowances, claim deductions
- Calculate tax liability — Apply the applicable corporate tax rate and check for MAT applicability
- Adjust advance tax and TDS credits — Tax already paid during the year reduces the final liability
- File Form 3CEB if international transactions exist (before November 30)
- Upload ITR-6 on the e-filing portal (incometax.gov.in) with DSC
- Verify — ITR is verified through DSC (mandatory for companies)
Penalties for Late Filing and Non-Filing
- Late filing fee — Section 234F: INR 5,000 if filed after due date but before December 31. INR 10,000 if filed after December 31 (reduced to INR 1,000 if total income is under INR 5 lakhs).
- Interest on unpaid tax — Section 234A: 1% per month on unpaid tax from the due date
- Interest on shortfall of advance tax — Section 234B: 1% per month on the shortfall
- Interest on deferment of advance tax — Section 234C: 1% per month for each quarter of deferment
- Penalty for concealment or misreporting — Section 270A: 50% of under-reported income (misreporting: 200%)
Common Mistakes
- Missing the November 30 deadline — Companies with international transactions (parent company payments, cross-border services) must file by November 30, not October 31. Many companies mistakenly treat the October 31 audit deadline as their filing deadline.
- Not filing Form 67 for foreign tax credit — If you fail to file Form 67 before the ITR due date, the foreign tax credit is lost. This effectively results in double taxation.
- Incorrect tax rate application — Companies opting for the concessional 22% rate under Section 115BAA cannot claim certain deductions (80G, 80-IA, etc.). Switching between old and new regimes mid-year causes errors.
- Not disclosing foreign assets in Schedule FA — Even if the Indian company itself does not hold foreign assets, the schedule must still be filled if directors or beneficial owners hold assets abroad (though this applies primarily to individuals).
- Carry forward of losses without timely filing — Losses can only be carried forward if the original return is filed before the due date. A belated return loses the right to carry forward business losses (except depreciation).
Practical Example
A German company owns a 100% subsidiary in Gurgaon. The Indian company earns INR 2 crores in revenue during FY 2025-26. It pays INR 15 lakhs per year to the German parent as a management fee — this is an international transaction requiring a transfer pricing report (Form 3CEB). The statutory and tax audits are completed by September 30, 2026. Form 3CEB is filed by October 31. The ITR-6 is filed on November 25, 2026 — five days before the November 30 deadline. The company pays corporate tax at 25.17% (22% base + 10% surcharge + 4% cess under Section 115BAA). Advance tax paid during the year is adjusted against the final liability.
Related Terms
- Corporate Tax — The rate applied to compute tax liability
- Transfer Pricing — Affects filing deadline and form requirements
- TDS — Credits claimed against tax liability in the ITR
- Statutory Audit — Must be completed before filing
Need help filing your Indian company's tax return from abroad? Beacon Filing coordinates audits, TP reports, and ITR filing for foreign-owned companies.