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 the registered non-profit organisation regime of the Income-tax Act, 2025 (section 11 of the Income-tax Act, 1961 — charitable trusts) use ITR-7. LLPs file ITR-5.
Legal Basis
- Section 263 of the Income-tax Act, 2025 (section 139(1) of the Income-tax Act, 1961) — Every company must file a return of income before the due date
- Section 263 — belated return (section 139(4) of the Income-tax Act, 1961) — Belated return can be filed up to December 31 of the assessment year
- Section 263 — revised return (section 139(5) of the Income-tax Act, 1961) — Revised return to correct errors, also due by December 31 of the AY
- Section 63 of the Income-tax Act, 2025 (section 44AB of the Income-tax Act, 1961) — Tax audit requirement for companies with turnover exceeding specified thresholds
- Section 172 of the Income-tax Act, 2025 (section 92E of the Income-tax Act, 1961) — 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 63) | 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 161 of the Income-tax Act, 2025 (section 92 of the Income-tax Act, 1961) requires arm's length pricing. You must file Form 48 (formerly Form 3CEB) (the transfer pricing report) by October 31 — one month before the November 30 ITR due date, not along with the return.
- Foreign tax credits — If the Indian company pays tax abroad (e.g., withholding tax deducted by a foreign client), it can claim credit under sections 159 and 160 of the Income-tax Act, 2025 (sections 90 and 91 of the Income-tax Act, 1961) read with the foreign tax credit rules. Form 67 must be filed on or before the end of the assessment year, the deadline substituted into Rule 128(9) by CBDT Notification No. 100/2022.
- 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 41 (formerly 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 393(2) of the Income-tax Act, 2025 (Table, Sl. No. 17; section 195 of the Income-tax Act, 1961), at the rates in force as reduced by any applicable treaty.
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 206 of the Income-tax Act, 2025 (section 115JB of the Income-tax Act, 1961)
- 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 48 if international transactions exist (before October 31)
- 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 428(a) of the Income-tax Act, 2025 (section 234F of the Income-tax Act, 1961) charges a fee where the return is furnished after the due date. For FY 2025-26 and earlier the section 234F fee is INR 5,000, reduced to INR 1,000 where total income does not exceed INR 5 lakh.
- Interest on unpaid tax — Section 423 of the Income-tax Act, 2025 (section 234A of the Income-tax Act, 1961): 1% per month on unpaid tax from the due date
- Interest on shortfall of advance tax — Section 424 of the Income-tax Act, 2025 (section 234B of the Income-tax Act, 1961): 1% per month on the shortfall
- Interest on deferment of advance tax — Section 425 of the Income-tax Act, 2025 (section 234C of the Income-tax Act, 1961): 1% per month for each quarter of deferment
- Penalty for concealment or misreporting — Section 439 of the Income-tax Act, 2025 (section 270A of the Income-tax Act, 1961): 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 by the end of the assessment year — the deadline substituted into Rule 128(9) by CBDT Notification No. 100/2022 — the foreign tax credit is at risk. This effectively results in double taxation.
- Incorrect tax rate application — Companies opting for the concessional 22% rate under section 200 read with section 205(1) of the Income-tax Act, 2025 (section 115BAA of the Income-tax Act, 1961) cannot claim certain deductions (sections 133 and 138 of the Income-tax Act, 2025; sections 80G and 80-IA of the Income-tax Act, 1961, among others). 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 48). The statutory and tax audits are completed by September 30, 2026. Form 48 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 200 read with section 205(1)). 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.