Why Startups in Bangalore Must File Income Tax Returns

Why Should Startups File Income Tax Returns?

Filing ITRs is compulsory to avoid penalties (up to ₹10,000 under Section 234F) and maintain compliance with the Income Tax Department. For Bangalore startups, it’s key to securing investor trust and Startup India perks like the Section 80-IAC tax holiday. Even loss-making startups must file to carry forward losses, offsetting future profits. X posts note that missed filings risk audits or funding hiccups. Advisorate's advisory tax experts keep your startup compliant and optimized!

Benefits of Filing Income Tax Returns for Startups

• Legal Compliance: Dodge fines and notices from tax authorities.
• Loss Carry-Forward: Use current losses to reduce future tax burdens.
• Investor Appeal: Clean tax records impress funders, vital in Bangalore.
• Tax Savings: Claim Startup India exemptions like 100% profit deduction.
• Trust Factor: Enhance credibility with banks and clients.

Tap into these perks with Advisorate’s startup tax filing services!

Step-by-Step Process to File Income Tax Returns for Startups

1. Determine Entity Type: Identify your structure—Pvt Ltd (ITR-6), LLP/Partnership (ITR-5), or Proprietorship (ITR-4).
2. Gather Financial Data: Compile income, expenses, and deductions for the financial year (April 1–March 31).
3. Check Audit Need: If turnover exceeds ₹1 crore (or ₹40 lakh for presumptive taxation opt-outs), get a Section 44AB audit.
4. Register on IT Portal: Sign up or log in at the Income Tax portal with your PAN and password.
5. Select ITR Form: Download and complete ITR-5 (LLP/Partnership) or ITR-6 (Pvt Ltd).
6. File Online: Upload the ITR, verify via Aadhaar OTP, e-Verify, or DSC, and submit by the deadline.
7. Claim Exemptions: Include DPIIT recognition for Startup India benefits like Section 80-IAC.

Let Advisorate guide your Bangalore startup through ITR filing seamlessly!

Documents Required to File Income Tax Returns

• PAN Card: Of the startup and directors/partners.
• Financial Statements: Balance sheet, P&L, and cash flow for the FY.
• Audit Report: Form 3CA/3CB and 3CD if turnover exceeds ₹1 crore (or ₹40 lakh in some cases).
• Bank Statements: For income/expense reconciliation.
• TDS Certificates: Form 16A/26AS for tax deducted at source.
• DPIIT Certificate: For Startup India exemptions (if applicable).
• Incorporation Details: From the MCA portal for Pvt Ltd or LLP status.
• GST Returns: If registered, to align turnover data.

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Timeline for Completion

• Financial Year End: March 31 (e.g., FY 2024-25 ends March 31, 2025).
• Audit Completion: By September 30 (if required).
• ITR Filing Deadline: July 31 (non-audit) or October 31 (audit) of the assessment year—e.g., July 31, 2025, for FY 2024-25.
• Late Filing: Up to December 31 with a ₹5,000-₹10,000 penalty (₹1,000 if income < ₹5 lakh).

Bangalore’s startup rhythm requires timely filings—Advisorate keeps you on schedule!