Understanding ITR 6: A guide for companies (other than section 8)

Income Tax Return (“ITR”) 6 is a form prescribed by the Income Tax Department of India for companies (other than Section 8 companies) that are required to file their income tax returns. This form applies to all companies registered under the Companies Act, 2013, except companies coming under Section 8 of Companies Act 2013: Formation of companies with charitable objects, etc.

The form captures the company’s income, deductions, tax liabilities, and other financial details. It ensures compliance with tax laws and helps businesses maintain transparency in their financial reporting.

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Parts of ITR 6 and their importance

The ITR 6 form is comprehensive, divided into multiple parts or sections, each with specific relevance:

1. Part A: General information

This section captures the basic details of the company.

• Personal information
• PAN, name, incorporation date, address, contact details
• Type of company: private, public, foreign, etc.
• Nature of business: select the industry type.
• Details of any merger, acquisition, or restructuring during the financial year.
• Filing status
• Choose whether the return is original or revised.
• Select the reason for filing the return (mandatory in case of loss).
• Audit information
• Are accounts maintained under Section 44AA?
• If income is declared under presumptive taxation (Sections 44AE, 44B, 44BB, etc.).
• Audit applicability under Section 44AB (if turnover exceeds ₹1 crore).
• Audit details, including date and CA details.
• Holding status
• Whether the company is a holding or subsidiary.
• If a subsidiary, provide holding company details.
• Key persons details
• Name, designation, PAN, DIN (if Director), and residential address of key officials.
• Shareholder information
• Details of persons holding 10% or more voting power.
• PAN, address, and share percentage.

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Also fill, Part A-OI: Other information

• Details of deductions and adjustments under various sections of the Income Tax Act.
• Disclosure of related party transactions, foreign assets, and liabilities.

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2. Part A-BS: Balance sheet

This section requires the financial status of the company as of the year end date March 31, 20xx.

a) Equity and liabilities

1. Shareholder's fund
   • Authorized & paid-up share capital
   • Reserves and surplus
2. Liabilities
   • Non-current liabilities (e.g., loans, bonds, debentures, deferred tax)
   • Current liabilities (e.g., trade payables, borrowings)
     

b) Assets

1. Non-current assets
   • Fixed assets (e.g., tangible, intangible, capital work-in-progress)
   • Financial assets (e.g., investments, deferred tax)
2. Current assets
   • Inventories, trade receivables, cash & bank balances

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Note: If the company follows Ind AS (Indian Accounting Standards), a separate balance sheet must be provided under Part A-BS Ind-AS.

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Part A-P&L: Profit and loss account

The Profit & loss account records the financial performance of the company.

a) Revenue details

• Sales/turnover, other operating income
• Non-operating income (interest, dividends, foreign exchange gains)

b) Expense details

• Cost of goods sold
• Administrative & selling expenses
• Employee costs, depreciation

c) Profit before tax

• Deduct tax provisions and adjustments.
• Arrive at net profit after tax.

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Also fill Part A-QD: Quantitative details

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4.Income computation schedules

The following schedules are critical in computing total income:

a) Schedule BP: Business & profession income

• Compute taxable business income after adjustments.
• Deduct allowable expenses.
• Compute net taxable business profits.
  

c) Schedule CG: Capital gains

Report interest, rental, dividend, or any miscellaneous income.

e) Schedule VIA: Deductions and exemptions

Claim deductions under various section for business activities such 80IA, 80I etc.
Charitable donations eligible for tax benefits under 80G.

f) Schedule MAT (Minimum alternate tax)

Applicable to companies paying tax under Section 115JB.
Calculation of MAT liability and MAT credit available.

g) Schedule FA: Foreign assets

Mandatory disclosure of foreign bank accounts, investments, and directorships.

h) Schedule SH & AL: Shareholding and assets & liabilities

Shareholding pattern details.
Movable and immovable assets owned by the company.

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5. Set-Off & carry forward of losses

• Schedule CYLA: Current year losses set-off

• Schedule BFLA: Brought forward losses adjustment

• Schedule CFL: Losses to be carried forward to future years

6. Part B-TI: Computation of total income

7. Part B – TTI: Computation of tax liability on total income

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8. Making tax payments

Fill in details of advance tax, self-assessment tax, TDS, and TCS:

• Schedule IT: Advance tax & self-assessment tax paid.
• Schedule TDS: Tax deducted at source (as per Form 26AS).
• Schedule TCS: Tax collected at source.

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9. Filing & verification

Companies need to fill all relevant sections accurately to ensure compliance with tax regulations.

Conclusion:

ITR 6 is an essential compliance requirement for companies other than Section 8 entities. It requires accurate reporting of financials, taxation, and other regulatory details.

Companies must ensure timely filing and correctness of information to avoid penalties and scrutiny. Online filing with digital signatures ensures transparency and efficiency in tax compliance.

For official guidelines and updates, refer to the Income Tax Department's e-Filing portal.

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Frequently Asked Questions (“FAQ”) on ITR 6

1. What is section 8?

Section 8 of Companies Act 2013: Formation of companies with charitable objects, etc. address rules related to companies which are formed for charitable purposes, are exempt from filing ITR 6. Instead, they file ITR 7 since they claim exemptions under Section 11 (Income from property held for charitable or religious purposes). Regular companies, including private limited and public limited companies, must file ITR 6.

2. How much time it will take to file ITR 6?

The time required to file ITR 6 depends on the complexity of the company’s financials. The process includes:

• Gathering financial information: Balance sheets, profit and loss statements, TDS details, and deductions.
• Reconciliation: Ensuring all tax credits match Form 26AS.
• Filing and verification: Filling the form online, verifying it through a digital signature, and submitting it.

For a small company, the process may take 2 to 3 days, while for large corporations, it may take 1 to 2 weeks.

3. Which mode is better to file ITR 6 online or offline?

ITR 6 must be filed online. However, companies can choose between:

• Online filing via the Income Tax portal: Enter details directly.
• Offline filing using Java or Excel utilities: Fill in details, generate an XML file, and upload it.

So which is better?

• Online filing is recommended as it ensures real-time validation, reduces errors, and allows instant submission.
• Offline filing is beneficial for large corporations that need internal approvals before submission.