A founder in Hyderabad filed his personal ITR-2 in July, showing salary from his company and some capital gains, and assumed compliance was done. In November he received a notice under Section 142(1) addressed to the company's PAN. The company — a two-year-old private limited with ₹40 lakh revenue and a small loss — had never filed an ITR-6. His CA had filed his return, not the company's. Those are two different assessees, two different PANs, two different forms, and two different deadlines. The company's non-filing carried a penalty exposure that dwarfed anything on his personal return.

This is one of the most common and most expensive misunderstandings in Indian startup compliance. Here is what the law actually says.

What the law actually requires

Filing is mandatory regardless of income or loss. Section 139(1) of the Income Tax Act 1961 requires every company to furnish a return of income for every previous year, whether or not it has any income. The proviso that exempts individuals below the basic exemption limit does not extend to companies. A dormant company with zero revenue, zero expenses and zero bank movement must still file. So must a company that made a loss.

The form is ITR-6. Rule 12 of the Income Tax Rules 1962 prescribes ITR-6 for companies other than those claiming exemption under Section 11 (charitable or religious trusts, which use ITR-7). A private limited company cannot file ITR-4, ITR-5, or any of the individual forms. ITR-6 must be furnished electronically under digital signature — Rule 12(3) permits no other verification mode for a company. There is no ITR-V paper route and no Aadhaar OTP route for a company.

The director's return is a separate obligation. A director files ITR-2 or ITR-3 in a personal capacity, reporting salary, director's remuneration, dividend income and capital gains. Since AY 2019-20, any individual who is a director in any company must file a return regardless of income level, and must disclose in the return the company's name, PAN, DIN and whether the shares are listed. That disclosure requirement is precisely why the department cross-matches director returns against company PANs — and why a director who files while his company does not is flagging himself.

Due dates for AY 2026-27 (FY 2025-26):

Company not required to have a tax audit: 31 October 2026 under Section 139(1) Explanation 2(a)(ii) — the extended date applicable to assessees who are companies. Note that companies do not get the 31 July date; the "31 July" deadline applies to non-audit individuals, not to companies.
Company with a transfer pricing obligation (any international transaction or specified domestic transaction requiring Form 3CEB under Section 92E): 30 November 2026.
Tax audit report in Form 3CA/3CD under Section 44AB, where turnover exceeds ₹1 crore (or ₹10 crore where cash receipts and cash payments each stay under 5% of the total): due 30 September 2026, one month ahead of the return.
Form 3CEB (transfer pricing report): 31 October 2026.
Belated return under Section 139(4): up to 31 December 2026.
Updated return (ITR-U) under Section 139(8A): up to 48 months from the end of the assessment year, following the Finance Act 2025 extension from 24 months — so up to 31 March 2031 for AY 2026-27, with escalating additional tax.

Schedule AL-1 — the balance sheet schedule most founders have never heard of. For companies, ITR-6 requires Schedule AL-1: Assets and Liabilities as at the end of the year, applicable to an unlisted company. It requires itemised disclosure of land and building (with address and cost), listed and unlisted shares held (with name, PAN and number of shares of the investee), loans and advances given, jewellery and bullion, vehicles, aircraft and yachts, and liabilities. This is separate from Schedule AL applicable to individuals with income above ₹50 lakh. The unlisted-company schedule has no income threshold — it applies to every unlisted company, including your two-person startup.

Schedule SH-1 — shareholding disclosure. An unlisted company must also file Schedule SH-1, listing every shareholder at year-end with name, residential status, PAN, date of allotment, number of shares, face value, issue price and the amount received. Schedule SH-2 captures the shareholding of the assessee company in other unlisted companies. This is where the department reconciles your cap table against your MGT-7A filed with the MCA — and where a mismatch generates a notice.

Practical implications

Late filing fee under Section 234F: ₹5,000. Modest on its own, but it is the least of the exposure.

Interest under Section 234A: 1% per month on unpaid tax from the due date to the actual filing date, plus 234B and 234C interest for advance tax shortfalls.

Loss of carry-forward. Section 80 is the provision that hurts most. Business loss and capital loss can be carried forward only if the return is filed on or before the Section 139(1) due date. A startup with a ₹60 lakh accumulated loss that files a belated return forfeits the right to set that loss against future profits. Unabsorbed depreciation under Section 32(2) survives a belated filing; business loss does not. This single rule turns a ₹5,000 late fee into a seven-figure tax cost three years later.

Prosecution under Section 276CC. Wilful failure to furnish a return is punishable with rigorous imprisonment of three months to two years (or six months to seven years where the tax evaded exceeds ₹25 lakh), plus fine. Prosecution is not initiated for every default, but the provision exists and is used against persistent non-filers. Under Section 278B, where the offence is by a company, every person who was in charge of and responsible for the conduct of the business — that is, the directors — is deemed guilty.

Best-judgment assessment under Section 144. If the company does not respond to a Section 142(1) notice, the Assessing Officer may assess income on his own estimate. Defending an inflated estimate is far more expensive than filing on time.

The MCA cross-reference. The ROC and the Income Tax Department now reconcile actively. Your AOC-4 financial statements filed with the MCA and your ITR-6 Schedule BP must tell the same story. Divergence in revenue, profit or shareholding between AOC-4, MGT-7A and ITR-6 is a standard scrutiny trigger under MCA21 v3, which flags mismatched filings for departmental review rather than waiting for a manual complaint. Founders who file a "clean" ITR-6 to look profitable to a lender, having filed a loss-making AOC-4 to the ROC, are creating a documented inconsistency across two statutory records.

A live deadline worth noting. MCA General Circular 03/2026 extended the Companies Compliance Facilitation Scheme (CCFS-2026) to 31 August 2026, allowing companies to file pending annual returns and financial statements at normal fees plus only 10% of additional fees. After that date the ROC has indicated it will begin adjudication and strike-off action. If your AOC-4 and MGT-7A backlog is the reason your ITR-6 numbers do not reconcile, the next seventeen days are the cheapest window you will get to fix it.

Step-by-step: what to do

Confirm the company has its own PAN and TAN. They are issued at incorporation via the SPICe+ form. If you have never seen the company's PAN card, retrieve it before anything else — you cannot file without it.
Determine whether Section 44AB applies. Compute FY 2025-26 turnover. Above ₹1 crore, a tax audit is required unless both cash receipts and cash payments are under 5% of the respective totals, in which case the threshold rises to ₹10 crore. If audit applies, appoint the tax auditor now — Form 3CA/3CD is due 30 September 2026.
Check for international transactions. Any transaction with an associated enterprise abroad — including a foreign parent, a foreign subsidiary, or a founder-owned overseas entity — triggers Form 3CEB under Section 92E and moves your ITR-6 due date to 30 November 2026. Payment for a foreign SaaS subscription from a related party counts.
Reconcile before you file. Line up four documents side by side: audited financial statements, AOC-4 as filed with the ROC, Form 26AS and AIS from the income tax portal, and GSTR-9 turnover. Resolve every difference and document the reason. Most notices originate here.
Complete Schedule SH-1 from the register of members, not from memory. Every allotment during the year needs its PAS-3 date, issue price and amount received. If your Schedule SH-1 disagrees with your MGT-7A, expect a query.
Complete Schedule AL-1 with actual cost, not book value after depreciation — the schedule asks for cost of acquisition for immovable property and investments.
Choose the tax regime deliberately. If the company intends to opt for the 22% rate under Section 115BAA, Form 10-IC must be filed electronically on or before the Section 139(1) due date. Filing the ITR-6 with the 115BAA option ticked but without Form 10-IC has been held to invalidate the election. The option, once exercised, is irrevocable for all subsequent years.
File with a valid Class 3 DSC of an authorised director. Verify the DSC has not expired — a mid-filing expiry is the single most common last-week failure.
Verify immediately and download the ITR-V acknowledgement. For a company, e-verification via DSC completes at submission; save the acknowledgement number in the statutory records file.
Diarise the follow-through: 30 September (Form 3CA/3CD), 31 October (ITR-6 and Form 3CEB), 15 December (third advance tax instalment), 31 December (belated return cut-off).

FAQ

Our company had zero transactions this year. Do we still file ITR-6?
Yes. Section 139(1) requires a company to file whether or not it has income. A nil ITR-6 is mandatory. So is AOC-4 and MGT-7A with the ROC. Three consecutive years of non-filing triggers director disqualification under Section 164(2) and strike-off proceedings under Section 248.

I filed my personal ITR and declared my director's salary. Isn't the company's income already taxed?
No. The company is a separate assessee under Section 2(31). Your salary is a deduction in the company's hands and income in yours. The company's profit after that deduction is taxed separately at the corporate rate. Two returns, two PANs, two liabilities.

We missed 31 October. Can we still carry forward our business loss?
No. Section 80 permits carry-forward of business loss under Section 72 and capital loss under Section 74 only where the return is filed within the Section 139(1) due date. You may still file a belated return under Section 139(4) until 31 December 2026 to avoid prosecution exposure and stop 234A interest, but the business loss is forfeited. Unabsorbed depreciation under Section 32(2) is not affected.

Does a small private limited company need Schedule AL-1 and SH-1?
Yes. Both schedules apply to unlisted companies without a turnover or income threshold. The "small company" definition in Section 2(85) of the Companies Act reduces certain MCA obligations; it has no effect on ITR-6 schedule requirements, which are governed by the Income Tax Rules.

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For a compliance audit of your company, visit pvtltd.co

This article is general guidance based on the Income Tax Act 1961, Income Tax Rules 1962 and the Companies Act 2013 as at 14 August 2026. Verify current due dates and thresholds on incometax.gov.in and mca.gov.in before acting, and consult your chartered accountant on your specific facts.

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