LLP or the Limited Partnership is a hybrid combination of a limited and partnership company. Minimum two partners are required to incorporate an LLP there is no such upper limit.
Limited Liability Partnerships are required to file the annual returns within 60 days from the end of the close of the financial year and account statement and solvency within 30 days from the end of six months of the closure of the financial year.
The financial year for the LLPs starts from the 1st of April to the 31st of March. The annual return for the LLPs is due on May 30th while the statement of accounts and solvency is due on the 30th of October of each financial year.
Besides the MCA annual return filing, the limited liability partnerships must also mandatorily file the income tax return every year.
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The income tax rate applicable for LLPs registered in India is 30% of the total income. Besides the income tax, a surcharge is levied on the income of the tax payable at the rate of 12% when the total income is exceeding Rs.1 crore.
Health and Education cess of 4% is applicable on the amount of income tax and the applicable surcharge.
Similar to income tax applicable for a company, LLP is also subject to minimum alternate tax. A minimum alternate tax of 18.5% of adjusted total income is applicable for LLP. Hence, income tax payable by LLP cannot be less than 18.5 percent (increased by income tax surcharge, education cess, and secondary and higher education cess).
LLPs that entered into an international transaction with associated enterprises or undertook certain Specified Domestic Transactions are required to file Form 3CEB. Form 3CEB must be certified by a Chartered Accountant. LLPs required to file Form 3CEB have 3oth November as the deadline for LLP tax filing.
LLPs must file an income tax return using Form ITR 5. Form ITR 5 can be filed online through the income tax website using the digital signature of the designated partner. After filing an LLP tax return, the taxpayer should print two copies of Form ITR-V.
One copy of ITR-V, signed by the assessee should be sent by ordinary post to Post Bag No. 1, Electronic City Office, Bengaluru–560100 (Karnataka). The other copy can be retained by the assessee for his record.
LLP tax payment can be made in physical mode through designated banks or E-payment mode. LLPs that are required to get their accounts audited are required to pay tax through e-payment mode only. To pay tax at designated banks, Challan ITNS 280 as provided below must be provided with the tax payment.
Pricing for Limited Liability Partnership Annual Filing & Compliances
All the Limited Liability Partnership are required to maintain proper account banks on a cash basis or accrual basis. As Private Limited Companies are required to maintain books of accounts only on an accrual basis.
The LLPs have the option of maintaining the books of accounts on a cash basis as well. The books of accounts must be maintained at the registered office of the LLP and must contain all the information like:
At the end of each financial year, the LLPs are required to prepare their financial statements within 6 months for filing with the ROC.
All registered LLPs are required to maintain their books of accounts and fill the data regarding the profits incurred as well as other financial data relevant to business and submit it along with Form 8 every year.
Form 8 must be attested by the designated partners by duly signing it. It is also necessary to get it certified by a practicing chartered accountant or a practicing company secretary or a practicing cost accountant.
Failing to filer the statement of accounts and the solvency report within the specified duration will lead to a penalty of Rs. 100 per day.
The LLPs are required to elect the partners for maintaining proper books of accounts and filing the annual return with the Ministry of Corporate Affairs annually.
The book of accounts of the LLPs need not be audited except in case the annual turnover is more than Rs.40 lakh or if the contribution is more than Rs. 25 lakh. Hence, the process of annual filing is simpler for the LLPs. Some of the annual filings are mandatory even if the LLP has begun the business or not.
The due date has been extended to 10th of January, 2021 from December 31st, 2020 and if tax audit is required for the LLP then the due date for IT returns for LLP has been extended till 15th February,2021 from 31st January, 2021.
Even if the LLP has not done any business for the current financial year, the LLP is required to file a Nil Income Tax returns with the tax authorities.
LLP Form 8 is an annual filing is to be filed with ROC every year. Statement of account and solvency shall be filed with the registrar within 30 days from the end of 6 months of the financial year to which the statement relates. The due date for LLP annual filing is 30th October 2020.
This form includes a declaration on the solvency state of the LLP by the designated partners and also information related to the statement of assets and the liabilities and statement of income and the expenditure of the LLPs.
LLPs are required to get the accounts audited by a practicing chartered accountant if the annual turnover in any financial year exceeds Rs. 40 lakhs or if the contribution exceeds Rs. 25 lakh.
To avail exemption from audits, the LLP accounts must contain a statement by the partners to the effect that the partners acknowledge their responsibilities for complying with the requirements concerning accounting and preparation of financial statements.
Your LLP will be assigned a dedicated Compliance Manager who will be a single point of contact to help you maintain the compliance for your LLP. You can get in touch with your Compliance Manager at anytime and get assistance on matters related to your LLP'S compliance.
Last updated: Mar 30, 2021