Business Income Tax Return: A Filing Guide for Companies, LLPs, Firms and Proprietors
Pick the correct form, close your audit before the return, and claim only what your books can
prove. That is the whole job of a business income tax return in one sentence, and the rest of this
page unpacks it.
The Corporate Tax & Advisory Division at LegalDev writes it from 10+ years of collective
experience in Indian corporate taxation, ITR filing for companies and LLPs, tax audits, and
handling assessments and notices.
Form for a Private Limited Company
ITR-6
Audit Cases Return (AY 2026-27)
21 November 2026
Company Rate (Section 115BAA)
About 25.17% Effective
Deadlines for FY 2025-26 (AY 2026-27)
You are filing under dates that moved recently, so check which row applies to you. Several
sources disagree, because some pages predate the CBDT's extension.
| Item |
Original date |
Current date |
| Non-audit business returns (ITR-3, ITR-4) |
31 August 2026 |
Passed; belated return possible to 31 December 2026 |
| Tax audit report (Forms 3CA/3CB with 3CD) |
30 September 2026 |
21 October 2026 |
| Return for audit cases |
31 October 2026 |
21 November 2026 |
| Transfer pricing cases |
Report 31 October; return 30 November 2026 |
Stated by sources as unchanged |
| Belated or revised return |
31 December 2026 |
31 December 2026 |
One caution on companies.
One source lists companies as covered by the 21 November extension, while the CBDT notice speaks
of persons subject to audit. If you run a private limited company, confirm against the official
notification before treating 21 November as your limit.
The consequence of missing a date is not abstract. A late return attracts a fee of up to ₹5,000
under Section 234F, plus interest under Section 234A on unpaid tax at 1% a month. Losses can
usually not be carried forward if the return is not filed in time, and for a business with a bad
year that is the costlier mistake.
Business tax audit under Section 44AB
The audit has to be signed by a chartered accountant, and it has to happen first. The return
cannot be filed on the portal until the report is uploaded, and the report is due a month before
the return date, which is why the CBDT's extension moved both dates together.
The main triggers under Section 44AB, for returns being filed now:
Business turnover above ₹1 crore, rising to ₹10 crore if cash receipts and cash payments are each within 5% of the total.
Professional receipts above ₹50 lakh.
Claiming lower profits than the presumptive rate while income exceeds the basic exemption limit, for those who opted into presumptive schemes in earlier years.
Certain other cases involving specified businesses and loss claims.
Missing the audit when it applies exposes you to a penalty under Section 271B, generally 0.5% of
turnover capped at ₹1,50,000. LLPs and companies face this audit trigger and their own statutory
audit duties as well, and the two get confused. A Companies Act audit does not replace a tax audit
report. The tax auditor reports on tax-specific matters in Form 3CD, including cash payments, TDS
defaults, and payments to micro and small enterprises.
From 1 April 2026, the Income-tax Act, 2025 replaces the 1961 Act, and the tax audit provision
carries a new section number with substantially the same rules. Returns for FY 2025-26 still
follow the old numbering.
Income tax rates for businesses
Companies
For a domestic company, the choice is between two regimes:
Section 115BAA
22% base rate, plus a flat 10% surcharge and 4% cess, an effective rate of about 25.17%. No minimum alternate tax (MAT). The trade-off is that most incentive deductions and exemptions are not available.
Regular regime
25% if turnover in the specified earlier year was up to ₹400 crore, otherwise 30%, with surcharge and cess on top, and MAT applying to book profits.
The concessional regime is an election made through a form on the portal, and it is generally
treated as irrevocable once chosen. Choosing it without modelling your actual deductions is a
common error.
Firms and LLPs
Firms and LLPs pay 30% on total income, with a 12% surcharge when income exceeds ₹1 crore, and 4%
cess. They pay no tax separately on partner remuneration beyond what the Act allows as deduction.
Alternate minimum tax at 18.5% applies where an LLP claims specified deductions.
Proprietors
A sole proprietor pays at individual slab rates. Under the new regime, which is the default, the
slabs for FY 2025-26 run from nil up to ₹4 lakh and climb through 5%, 10%, 15%, 20% and 25% to 30%
above ₹24 lakh. A rebate under Section 87A means resident individuals with taxable income up to
₹12 lakh pay no tax on ordinary income. Individuals with business income can opt out of the new
regime but have limited ability to switch back, so decide with a full-year projection in hand.
Check the current-year rate card at incometax.gov.in before filing.
Deductions that matter in corporate tax planning
The sections that move the numbers most:
Ordinary business expenses (Sections 30 to 37): rent, repairs, salaries, interest on business borrowings, bad debts written off, and a general category for any expense incurred wholly and exclusively for the business.
Depreciation (Section 32): on block-of-asset rates, including additional depreciation on eligible new plant. Capitalise correctly, because treating a capital item as a revenue expense gets disallowed.
Payments to micro and small enterprises (Section 43B(h)): the expense is deductible only in the year you actually pay, if payment is delayed beyond the statutory 15 or 45 days. This one catches growing companies every year.
Employment-linked deduction (Section 80JJAA): for additional employee cost, available even under the concessional corporate regime.
Startup profit deduction (Section 80-IAC): for recognised startups meeting the conditions.
Intercorporate dividends (Section 80M): relief against dividends passed on to shareholders.
Two warnings, both from the side of what you cannot do. Cash payments above ₹10,000 to a single
person in a day are disallowed under Section 40A(3), and expenses where TDS was not deducted can
be partly disallowed under Section 40(a)(ia). Companies under Section 115BAA also forfeit most
Chapter VI-A deductions, including donations under Section 80G, so run both regimes before
electing.
None of this is a trick. It is arithmetic done before the year closes, not after.
Filing step by step
From closed books to e-verification.
1
Close books
Finalise the trial balance, depreciation schedule and loan confirmations.
2
Reconcile TDS
Match Form 26AS and the annual information statement against your books.
3
Complete the audit
Upload Form 3CA/3CB with 3CD.
4
Choose the correct form
Carry forward any prior-year losses.
5
Compute tax
Deduct advance tax and TDS credit, and pay any self-assessment tax by challan.
6
File and verify
A return is treated as not filed until verified electronically within the allowed time. Many businesses stumble here.
Keep ready: audited financials, bank statements, GST returns for turnover
cross-checking, TDS certificates, capital gains statements, loan schedules and details of foreign
transactions.
Why business returns draw notices
Turnover in the income tax return does not match GST returns or the annual information statement.
Large cash deposits or payments with no explanation.
Expenses claimed against unregistered or non-compliant vendors.
Mismatch between TDS credit claimed and TDS credit in Form 26AS.
Loan or share capital credits with weak backing for source.
Deductions claimed under the concessional corporate regime that it does not allow.
A notice does not mean you have done wrong. It does mean a number somewhere disagrees with another
number, and the response lives or dies on documents.
How LegalDev handles business returns
We take over from closed books through verification: form selection, regime modelling for
companies and proprietors, coordination of the Section 44AB audit, return preparation and
e-verification. We also reply to notices and appear in assessments when the department asks
questions. See our income tax return filing for businesses, tax audit support, or income tax notice
replies. If a deadline is close, contact us with your last audited accounts.
Frequently Asked Questions (FAQs)
ITR-6, every year, including loss-making and dormant years.
ITR-5. LLPs are not eligible for presumptive taxation on ITR-4.
For FY 2025-26, the CBDT extended the date from 30 September to 21 October 2026, and the linked return date from 31 October to 21 November 2026 for audit cases.
Businesses with turnover above ₹1 crore (₹10 crore if cash transactions stay within 5%), professionals with receipts above ₹50 lakh, and certain presumptive-scheme cases.
Generally 0.5% of turnover or gross receipts, capped at ₹1,50,000, unless you show reasonable cause.
Yes, a belated return can be filed up to 31 December 2026 for AY 2026-27, with a late fee and interest. Some losses cannot then be carried forward.
Under Section 115BAA, 22% plus surcharge and cess (about 25.17% in total). Under the regular regime, 25% or 30% depending on turnover, plus surcharge and cess, and MAT may apply.
No. It cuts the rate but removes many deductions. The better choice depends on your actual deductions and losses, so compute both.
It is treated as not filed. Verify within the time permitted after filing.
No. A proprietor's own drawings are not a business expense. Their income is taxed as business profit.
It applies from tax year 2026-27 onwards. The return you are filing now for FY 2025-26 follows the 1961 Act.
Mismatches between your return and GST data, TDS credit, bank activity or the annual information statement, plus unexplained credits and cash.