LLP Compliance

LLP or the Limited Partnership is a hybrid combination of a limited and a partnership company. A minimum of 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.

Tracequality provides a comprehensive LLP compliance service that includes annual filing and LLP income tax return filing at a very affordable price point.

Income Tax Rate for LLP

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 & Education C

A health and Education cess of 4% is applicable on the amount of income tax and the applicable surcharge.

Minimum Alternate Tax (MAT) for LLP

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 Involved in International Transaction

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.

Procedure 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

LLP tax payments can be made physically mode through designated banks or through 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.

LLP Accounts Maintenance

All the Limited Liability Partnerships 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:

  • Money received and spent
  • Assets and liabilities
  • Statement of COGS
  • Inventories and finished goods statement.

At the end of each financial year, the LLPs are required to prepare their financial statements within 6 months for filing with the ROC.

Enquire now