Increase In Penalty For Not Filing Annual Return

The Companies (Registration Offices and Fees) Second Amendment Rules, 2018 was notified by the Ministry of Corporate Affairs on 7th May, 2018. This rule is a very important rule for all professionals and Entrepreneurs who are Directors of a company. By implementing this rule, there will be a very significant Increase In Penalty For Not Filing Annual Return from 1st July 2018. Hence, any person who is a shareholder or Director in a

must take steps to immediately file any overdue compliance to prevent heavy penalty which would become due from 1st July 2018.

Read The Companies (Registration Offices and Fees) Second Amendment Rules, 2018.

Announcement by MCA

The Ministry of Corporate Affairs on 8th May 2018 announced the following on their home page: "The Companies (Registration Offices and Fees) Second Amendment Rules 2018 has been notified on

7th May 2018

. Accordingly, in case the due date of filings under Section 92 (Annual Return) or 137 (Annual Financial Statement) of the Companies Act, 2013 expires after

30/06/2018

, the additional fee

@Rs.100 per day

shall become payable in respect of

MGT-7, AoC-4, AoC-4 XBRL and AoC-4 CFS

. In all other cases where the belated annual returns or balance sheet/financial statement which were due to be filed whether under the Companies Act,1956

(23AC,23ACA,23AC XBRL,23ACA XBRL,20B,21A)

or the Companies Act, 2013

(MGT-7, AoC-4, AoC-4 XBRL and AoC-4 CFS)

additional fee as per the applicable slab for the period of delay up to 30th June 2018 plus

@Rs.100 per day

w.e.f 1st July 2018 shall become payable. Stakeholders are advised to take note and plan accordingly."

MGT-7 & AOC-4

Form MGT-7 & Form AOC-4 must be filed by all companies in India as a part of their annual compliance. Even companies that have no activity are required to file Form MGT-7 and Form AOC-4. Form MGT-7 is the form for filing annual return by a company. The due date for filing MGT-7 is 60 days from date of

Annual General Meeting

. The due date for conducting annual general meeting is on or before the 30th September following end of a financial year. Hence, the due date for filing form MGT-7 is normally the 29th of November. (Know more about

MGT-7

) The MCA form for filing financial statements is AOC-4. Hence, Form AOC-4 is submitted with the MCA for each Financial Year within 30 days of a company’s annual general meeting. Know more about

Form AOC-4.

Increase in Penalty for Not Filing MGT-7 & AOC-4

With the above announcement, MCA has significantly increased the penalty for not filing annual return of a company. The penalty for not filing annual return of a company after 1st July 2018 would be Rs.100 per day per form. Since, a company must file both MGT-7 and AOC-4, the penalty would be Rs.200 per day for not filing annual return. If a company that was incorporated under Companies Act, 1956 or Companies Act, 2013 has so far not filed its annual return, it can file annual return paying the reduced penalty under the old regulations upto 30th June 2018. From 1st July 2018, the penalty would be increased multi-fold to Rs.100 per day per form. A comparison of penalty under present regulations and proposed rules from 1st July 2018 is reproduced below:

Period of Delay	Current Penalty	Proposed Penalty
Upto 15 days (sections 93,139 and 157)	Rs.400	Upto Rs.3000
More than 15 days and upto 30 days (Sections 93, 139 and 157) and upto 30 days in remaining forms.	Rs.800	Upto Rs.6000
More than 30 days and upto 60 days	Rs.1600	Upto Rs.12000
More than 60 days and upto 90 days	Rs.2400	Upto Rs.18000
More than 90 days and upto 180 days	Rs.4000	Upto Rs.36000
More than 180 days and upto 270 days	Rs.4800	Upto Rs.54,000
Delay beyond 270 days	Rs.100 per day	Rs. 100 per day per form

Filing Annual Return of Company

In 2018, the penalty for not filing MCA return and income tax return of a company has been significantly increased by the Government. Read our guides to know more about the changes in regulation:

1
2018 Income Tax and MCA Return Due Dates for Company.

To file the income tax return and annual return of a company and , the financial statements must be prepared, directors report must be prepare and annual general meeting must be conducted. IndiaFilings offers an easy and online process for maintaining your company's compliance through an online platform at just Rs.19899 per year. Talk to our Compliance Advisors or email us at

sales@indiafilings.com

to know more about maintaining compliance for your company through IndiaFilings. Know more about

Company Annual Return Filing

Back to Learn

Frequently Asked Questions

Common questions about Annual Return Filing Penalties and Compliance Services.

The Companies (Registration Offices and Fees) Second Amendment Rules, 2018 introduces a significant increase in penalty for not filing annual returns (MGT-7 and AOC-4) for companies in India. The penalty for delayed filing will increase to Rs. 100 per day per form from July 1, 2018, making it crucial for companies to file their overdue compliances promptly.

Companies in India are required to file Form MGT-7 (Annual Return) and Form AOC-4 (Financial Statements) annually as part of their compliance obligations. Even companies with no activity must file these forms.

The due date for filing MGT-7 (Annual Return) is within 60 days from the date of the Annual General Meeting (AGM), which should be held on or before September 30th after the end of the financial year. The due date for filing AOC-4 (Financial Statements) is within 30 days of the AGM.

Before July 1, 2018, the penalty for delayed filing of annual returns follows a slab system based on the duration of delay, ranging from Rs. 400 (up to 15 days delay) to Rs. 4,800 (180-270 days delay). Beyond 270 days, the penalty is currently Rs. 100 per day.

From July 1, 2018, the penalty for not filing annual returns (MGT-7 and AOC-4) will be a flat rate of Rs. 100 per day per form, which amounts to Rs. 200 per day for both forms combined.

Yes, companies that have not filed their annual returns can still file them before July 1, 2018, and pay the reduced penalty under the old regulations. This will help them avoid the significantly higher penalty that will come into effect from July 1, 2018.

Based on the information provided, there is no exception mentioned for the increased penalty for not filing annual returns (MGT-7 and AOC-4) after July 1, 2018. The penalty will apply to all companies, regardless of their status or size.

Companies should take immediate steps to file any overdue compliances, such as MGT-7 and AOC-4, before July 1, 2018, to avoid the heavy penalty that will become due from that date. They should also ensure timely filing of annual returns going forward.

Yes, companies can seek professional assistance from service providers like IndiaFilings to ensure timely and accurate filing of annual returns (MGT-7 and AOC-4) and maintain compliance with regulatory requirements. IndiaFilings offers an online platform and advisory services for this purpose.

Companies can refer to the detailed guides provided by IndiaFilings on their website, such as "2018 Penalty for Not Filing Annual Return or Income Tax Return of Company" and "2018 Income Tax and MCA Return Due Dates for Company." Additionally, they can contact IndiaFilings' Compliance Advisors or email sales@indiafilings.com for further assistance and information.