Income Tax Compliance

Income Tax Compliance Services

Income tax compliance involves meeting the legal requirements for reporting income, calculating taxes, and filing tax returns.

  • Expert consultation and advisory services on income tax compliance.
  • Comprehensive preparation and filing of income tax returns.
  • Assistance with tax planning strategies to optimise overall tax liability.
  • Professional reviews and audits of financial records to ensure compliance.

Overview of Income Tax Compliance

In today’s business landscape, understanding tax and regulatory policies is essential for growth, especially with the rise of multinational investments in India. Leading tax consultants help businesses navigate income tax complexities and regulatory challenges. As India modernizes its tax system through digital platforms, companies must consider tax implications when expanding or restructuring. Many businesses outsource tax functions to optimize their operations and ensure alignment between investments and tax management.

Income Tax Compliances in India

In India, businesses and individuals must adhere to mandatory income tax compliances, including:

  1. Obtaining PAN: A Permanent Account Number (PAN) is required for tax identification and various financial transactions.
  2. Filing ITR: Taxpayers must file annual income tax returns (ITR), detailing income, deductions, and taxes paid, typically by July 31st.
  3. Paying Taxes: Timely payment of taxes, including advance tax or self-assessment tax, is required to avoid penalties.
  4. TDS (Tax Deducted at Source): Employers and financial institutions must deduct TDS from payments, which must be reflected in the taxpayer’s Form 26AS.
  5. Tax Audits: Entities meeting specific criteria must undergo a tax audit by a qualified chartered accountant, filing the report with ITR.
  6. Maintaining Books of Accounts: Businesses must keep accurate records of income, expenses, assets, and liabilities.
  7. Advance Tax Payments: Taxpayers with significant tax liability must pay advance tax in instalments.
  8. Obtaining TAN: Entities deducting TDS or collecting TCS must obtain a Tax Deduction and Collection Account Number (TAN).
  9. Tax Computation and Assessment: Taxpayers must compute taxable income as per the prescribed rules, with potential scrutiny by tax authorities.
  10. Record-Keeping: Proper documentation for deductions and exemptions must be retained for a specified period.
  11. Compliance with Tax Notices: Taxpayers must respond to any notices from the Income Tax Department within the stipulated time.
  12. Transfer Pricing Compliance: Businesses involved in international transactions with associated enterprises must comply with transfer pricing regulations.
  13. Specific Reporting Requirements: Certain transactions, such as high-value transactions and foreign assets, must be reported.
  14. Seeking Professional Assistance: Consulting with qualified professionals, like chartered accountants, ensures proper compliance with tax laws.

ITR Filing for Individuals

Income Tax Return (ITR) is a form in which the taxpayers file information about their income earned and tax applicable, to the income tax department.

Types of ITR Forms for Individuals:

1. ITR-1 (Sahaj)

  • Who should file: Salaried individuals, pensioners, or those with income from a single house property, other sources (like interest).
  • Income Sources: Salary, Pension, One House Property, Other Sources.

2. ITR-2

  • Who should file: Individuals/HUFs with income from multiple house properties, capital gains, or foreign income.
  • Income Sources: Salary, House Property, Capital Gains, Foreign Income.

3. ITR-3

  • Who should file: Individuals/HUFs with income from business/profession (self-employed, partners in firms).
  • Income Sources: Salary, Business Income, Capital Gains, Other Sources.

4. ITR-4 (Sugam)

  • Who should file: Individuals/HUFs with income under Presumptive Taxation Scheme (Section 44AD, 44ADA, 44AE).
  • Income Sources: Business/Profession Income (freelancers, small businesses).

ITR Filing for Other Entities (Non-Individuals)

1. COMPANIES

  • ITR-6: For companies, excluding charitable organizations under Section 11.
  • Income: Income, deductions, taxes paid, and audit details.

2. PARTNERSHIP FIRMS & LLPS

  • ITR-5: For partnership firms and LLPs.
  • Income: Business/profession income and profit/loss statement.

3. TRUSTS & CHARITABLE INSTITUTIONS

  • ITR-7: For trusts, political parties, and charitable organizations.
  • Income: Income from charitable activities, donations, investments.

4. NON-RESIDENTS & NRIS

  • ITR-2, ITR-3, or ITR-5: For NRIs with income from India.
  • Income: Salary in India, property income, capital gains.

5. HUF (Hindu Undivided Family)

  • ITR-2 or ITR-3: HUFs must file if income exceeds exempt limit.
  • Income: Similar deductions and exemptions as individuals.

Services Offered by TaxMyles in Income Tax Compliance

TaxMyles specializes in providing comprehensive income tax compliance services for businesses and individuals in India. Our services ensure that you meet all regulatory requirements, avoid penalties, and optimize your tax liability. Here’s what we offer:

  1. Expert Consultation and Advisory: Guidance on income tax compliance, ensuring adherence to the latest tax laws and regulations.
  2. Income Tax Return Filing: Preparation and filing of accurate income tax returns for individuals and businesses, focusing on tax optimization.
  3. Tax Planning Strategies: Assistance with tax planning to maximize deductions, exemptions, and credits, reducing overall tax liability.
  4. Financial Record Audits: Conducting thorough reviews and audits of financial records to ensure compliance and accurate income reporting.
  5. Tax-Saving Advisory: Providing advice on effective tax-saving strategies and available deductions to reduce tax burden.

With TaxMyles, businesses can stay compliant with tax laws and avoid the consequences of non-compliance. We provide prompt and effective solutions to help manage your business seamlessly.