Income Tax Act, 1961 laid down many compliances which needs to be completed by the start-ups like
The first step for filing Income Tax return is to identify the applicable form. There are primarily seven (7) types of form for Income Tax return which are as follows:
| Form Type | Usage |
|---|---|
| ITR-1 | Income from Salary, House Property or Other Source. |
| ITR-2 | Individual and HUF not having Business or profession income. |
| ITR-3 | In case individual and HUF having income from business or profession then they shall file ITR-3. |
| ITR-4 | Individual, HUF and firm being resident and having total income uptoRs 50 Lac and having business income U/s 44AD, 44AE. |
| ITR-5 | Partnership Firm or LLP |
| ITR-6 | Companies. |
| ITR-7 | Trust or NGO |
Any Startup Company whose turnover are more than the prescribed threshold limit (currently INR 1 Crores) shall require to get its accounts audited from a auditor.
Statement of financial transaction (SFT) reporting is governed by Section 285BA of the Income Tax Act, and specified person as defined below needs to report the specified transactions in Form 61A.
| Nature of Transaction | Monetary Threshold | Specified Person |
|---|---|---|
| Cash payment purchase of Bank drafts | Rs 10Lacs or more in FY | A Banking company or Co-operative bank. |
| Cash payments for purchase of prepaid instrument | Rs 10Lacs or more in FY | |
| Cash Deposit/withdrawl more than 50lac in Current Account | Rs 50 Lacs or more in FY | |
| Cash deposit in one or more accounts other than a current account | ||
| 1 Utility Bill (Bank Statement, Mobile Bill, Electricity bill not older than 2 months) | Rs 10Lacs or more than in FY | A Banking company or Co-operative bank, Nidhi Company and NBFC. |
| Time Deposits | Rs 10Lacs or more in FY | A Banking company or Co-operative bank, Nidhi Company and NBFC. |
| Credit Card Payment | Rs 1 Lacs or more paid in cash Rs 10 Lacs or more paid by any other mode |
A Banking company or Co-operative bank and any company issuing cr card. |
| Receipt from issuing bonds or debenture | Rs 10Lacs or more in FY | Company issuing Bonds or Debenture |
| Receipt from issuing shares | Rs 10Lacs or more in FY | Company issuing shares |
| Buy Back of shares | Rs 10Lacs or more in FY | Listed Company |
| Receipt from issuing units of Mutual Fund | Rs 10Lacs or more in FY | Trustee or manager of Mutual Fund |
| Receipt from sale of foreign currency, travellers cheque etc. | Rs 10Lacs or more in FY | Person authorised as per FEMA,1999. |
| Purchase or sale of Immovable Property | Transaction value more than Rs 30Lacs | Inspector appointed under registration Act,1908. |
| Cash receipt for sale | Exceeding Rs2 Lacs | Person liable to audit under Sec 44AB of the Income Tax Act, 1961. |
In case of non-furnishing of SFT, income tax authorities may serve a notice to furnish SFT within a period not exceeding 30 days.INR 500 per day shall be charged during those 30 days for no of days during which default continues.
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