Definition- Limited Liability Partnership (LLP) u/s 2(n) of LLP Act 2008 means a partnership formed and registered under Limited Liability Partnership Act, 2008, regulated by Registrar of Companies (ROC), Ministry of Corporate Affairs (MCA).
Mandatory Compliances for an LLP
Registered LLPs with the Ministry of Corporate Affairs (MCA) needs to adhere to the following mandatory compliance requirements:
- Annual Return – LLP Form-11
- Account & Solvency – LLP Form-8
III. Income Tax Returns
LLP ANNUAL COMPLIANCES
Following are the annual compliances required for LLP which our team of experts will be providing to you:
- Form-8-
Due Date- on or before 30th October every year (For F.Y. 2019-20 due date is 30-10-2020)
- Form-11
Form 11 contains details of the number of partners and summary of partners. All LLPs should file this form within 60 days from the end of the financial year with the prescribed fee. Hence, the due date for filing LLP Form 11 is 30th May each year.
Due Date– Within 60 days of closer of financial year (For F.Y. 2019-20 due date is 30-05-2020)
Penalty/Consequences for not filing Form-11 and Form- 8
- For LLP per day penalty of Rs. 100 till the filing is completed. (Separately for both forms)
For example: If the Form 11/ Form 8 of your LLP is not filed within the due dates and suppose the delay is of 15 days for each form then the Government penalty fees will be Rs. 3000 in total(Rs.1500/- for each form for 15 days).
- for Designated Partner: From Rs. 10,000 to Rs. 100,000 Penalty
- ROC can issue Notice to LLP and initiate legal proceedings, like striking off the name of LLP.
- Income Tax Return
LLPs must file income tax return using Form ITR 5.The deadline for LLP tax filing in India is as follows:
Sl. No. | Income Tax Return Particulars | Due Date |
1. | In case Audit is not required (Those LLP whose annual turnover does not exceed Rs. 40 lacs or partner’s obligation of contribution exceeds Rs. 25 lacs are required to file their Income Tax return. They are not required to get their accounts audited by their Auditor) | 31st July of every year |
2. | In Case Audit is required (Those LLPs whose annual turnover exceeds Rs. 40 lacs or partner’s obligation of contribution exceeds Rs. 25 lacs are required to file their Income Tax return and also, they are required to get their books audited under the Income Tax Act.) | 30th September of every year |
3. | LLPs Involved in International Transaction (LLP that have entered into an international transaction with an associated enterprises or undertook certain Specified Domestic Transactions (above a specified limit) are required to file Form 3CEB, which must be certified by a Chartered Accountant.) | 30th November of every year |
Tax Audit
LLPs are separate legal entities. The responsibility of the Partners is to maintain proper book of accounts and file annual return with the MCA each financial year. LLPs are not required to audit its accounts unless the annual turnover exceeds Rs.40 lakhs or if the contribution exceeds Rs.25 lakhs.
- Tax Structure of LLP for F.Y. 2019-20
The Income Tax rate for LLPs is 30% (flat):
- a) Surcharge: In addition to income tax, the amount of income-tax shall be increased by a surcharge at the rate of 12% of such tax, when total income exceeds Rs. 1 crore. But, the surcharge shall be subject to a marginal relief (where income exceeds Ra. 1 crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of Rs. 1 crore rupees by more than the amount of income that exceeds Rs. 1 crore rupees).
- b) Health and Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of 4% of such income-tax and surcharge
- Alternate Minimum Tax: Tax payable by LLP should be minimum @ 18.5% (increased by Surcharge and HEC) of “adjusted total income” under section 115JC in case normal income tax is less than AMT.
- Partner’s KYC
Every Director who has been allotted DIN and whose DIN is in ‘Approved’ status would be mandatorily required to file form DIR-3 KYC. While filing the form, the Unique Personal Mobile Number and Personal Email ID would have to be mandatorily indicated and would be duly verified by One Time Password (OTP).
