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
- Determine Entity Type: Identify your structure—Pvt Ltd (ITR-6), LLP/Partnership (ITR-5), or Proprietorship (ITR-4).
- Gather Financial Data: Compile income, expenses, and deductions for the financial year (April 1–March 31).
- Check Audit Need: If turnover exceeds ₹1 crore (or ₹40 lakh for presumptive taxation opt-outs), get a Section 44AB audit.
- Register on IT Portal: Sign up or log in at the Income Tax portal with your PAN and password.
- Select ITR Form: Download and complete ITR-5 (LLP/Partnership) or ITR-6 (Pvt Ltd).
- File Online: Upload the ITR, verify via Aadhaar OTP, e-Verify, or DSC, and submit by the deadline.
- 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.
Advisorate organizes your tax docs for effortless filing—reach out now!
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!
FAQ About Filing Income Tax Returns for Startups
Which ITR form do startups use?
Pvt Ltd files ITR-6, LLPs/Partnerships use ITR-5, proprietorships use ITR-4—depends on your entity.
Is ITR filing required with no profit?
Yes, to carry forward losses and stay compliant—file even at zero income.
Can Bangalore startups file ITRs online?
Yes, via the Income Tax portal—Advisorate manages it for you!
What’s the penalty for late ITR filing?
₹5,000 (or ₹10,000 post-December 31), reduced to ₹1,000 for income below ₹5 lakh.
How do Startup India benefits affect ITR?
DPIIT-recognized startups claim Section 80-IAC in ITR—Advisorate maximizes these savings!