ITR Filing for Companies & Trusts in India — FY 2025-26

Complete Guide to ITR Filing for Companies & Trusts (FY 2025-26 / AY 2026-27)

Companies and trusts are among the most complex categories of taxpayers in India. Unlike individuals or proprietors, a private limited company, public limited company, or One Person Company (OPC) is a separate legal entity entirely distinct from its shareholders and directors. It has its own PAN, files its own income tax return, and pays tax at rates prescribed specifically for companies under the Income Tax Act, 1961. All companies — whether profit-making or loss-making — must file ITR-6 every year without exception.

Trusts, NGOs, and charitable institutions operate under an entirely different taxation framework. Entities registered under Section 12A/12AB of the Income Tax Act and approved under Section 80G can claim near-complete exemption from income tax on income applied for charitable or religious purposes. However, this exemption is conditional on strict compliance requirements — including annual ITR-7 filing, maintenance of accounts, and adherence to application-of-income rules. Non-compliance results in cancellation of registration and full taxation of accumulated corpus.

Taxvio, based in Khatauli (Muzaffarnagar, UP), provides end-to-end ITR filing services for companies and trusts across Uttar Pradesh and pan-India through our secure online platform. Our CA-assisted team handles ITR-6, ITR-7, statutory audit coordination, MAT computation, 12A/80G compliance, and all associated income tax filings.

ITR-6 — Income Tax Return for Companies

ITR-6 is the prescribed form for all domestic and foreign companies registered under the Companies Act, 2013 or earlier acts — except those claiming exemption under Section 11 (charitable/religious trusts). ITR-6 is an elaborate form that requires:

• Audited Balance Sheet and Profit & Loss Account
• Schedule of fixed assets and depreciation (Income Tax Act rates)
• Details of all related party transactions
• MAT (Minimum Alternate Tax) computation under Section 115JB
• Details of brought-forward losses, unabsorbed depreciation, and MAT credit
• Director details, shareholding pattern, and subsidiary information
• Tax audit report linkage (Form 3CA/3CD mandatory for all companies)
• Details of international / domestic transfer pricing transactions (if applicable)
• Dividend distribution details and TDS compliance summary

ITR-7 — Income Tax Return for Trusts, NGOs & Exempt Entities

ITR-7 must be filed by entities that are required to furnish a return under Sections 139(4A), 139(4B), 139(4C), or 139(4D) of the Income Tax Act. These include:

• Charitable & Religious Trusts — Public trusts registered under Section 12A/12AB claiming exemption under Section 11 and 12.
• Section 8 Companies — Non-profit companies (formerly Section 25 companies) registered under the Companies Act for charitable purposes.
• NGOs & Societies — Societies registered under the Societies Registration Act claiming tax exemption.
• Political Parties — Registered political parties filing under Section 139(4B).
• Research Associations, Educational Institutions & Hospitals — Entities approved under Section 10(23C) for income tax exemption.
• Mutual Funds & Securitisation Trusts — Entities filing under Section 139(4D).

ITR-7 requires detailed reporting of income received, income applied for charitable purposes, accumulation of income under Section 11(2), investment of funds, and compliance with the application-of-income mandate. Failure to apply at least 85% of income for charitable purposes — or to accumulate the balance with proper Form 9A/10 filings — results in the unapplied income becoming fully taxable.

Business Deductions & Expenses for Companies (ITR-6)

Companies can claim all legitimate business expenses as deductions against gross income. Key deductions include:

• Depreciation under Income Tax Act — Block-wise depreciation on plant & machinery, computers, vehicles, furniture, and buildings at prescribed IT Act rates (separate from Companies Act rates used in books).
• Employee Costs — Salaries, PF, ESI, gratuity provisions (within limits), and employee welfare expenses.
• Director Remuneration — Managerial remuneration paid to directors, subject to Companies Act limits and disclosure requirements in ITR-6.
• Interest on Business Borrowings — Interest paid on loans, debentures, and working capital facilities. Thin capitalisation rules (Section 94B) may limit deductions for companies with significant foreign borrowings.
• R&D Expenditure — Companies can claim 100% deduction on revenue expenditure incurred on in-house R&D facilities approved by DSIR (Section 35).
• CSR Expenditure — Note: CSR spending under Section 135 of the Companies Act is generally not deductible under Section 37(1) of the Income Tax Act. This is a common error in company ITRs.
• Brought-Forward Losses & Unabsorbed Depreciation — Companies can carry forward business losses for 8 years and unabsorbed depreciation indefinitely, subject to continuity-of-ownership conditions under Section 79.

Tax Audit & Statutory Audit — Mandatory for All Companies

Companies in India are subject to two mandatory audits every year:

• Statutory Audit under Companies Act — Mandatory for all registered companies regardless of turnover. The statutory auditor must be a practicing CA appointed by shareholders in the AGM. Audited financial statements form the basis for ITR-6 preparation.
• Tax Audit under Section 44AB — Mandatory for all companies since companies are always required to maintain and audit accounts. The tax audit report in Form 3CA/3CD must be filed on the Income Tax portal before the ITR due date.

Taxvio coordinates with your statutory auditor to obtain the audited financials and then prepares the tax audit report and ITR-6 in parallel — ensuring both are filed well before the October deadline. For trusts requiring audit under Section 12A/12AB, we similarly coordinate audit completion and ITR-7 preparation.

Documents Required for Company / Trust ITR Filing

For Companies (ITR-6):

• Audited Balance Sheet, P&L Account, and Notes to Accounts
• Depreciation schedule (both Companies Act and Income Tax Act)
• Tax audit report (Form 3CA/3CD) — if separately filed
• Form 26AS and AIS for the company's PAN
• TDS certificates received (Form 16A from clients/banks)
• Advance tax payment challans (Form 280)
• MAT computation worksheet (book profit reconciliation)
• Previous year's ITR acknowledgement and MAT credit details
• Director DIN details and their remuneration details
• GST returns — GSTR-1, GSTR-3B, GSTR-9
• DSC (Digital Signature Certificate) of authorised signatory

For Trusts / NGOs (ITR-7):

• 12A / 12AB registration certificate from Income Tax Department
• 80G approval certificate (if applicable)
• Audited accounts — Receipt & Payment account, Income & Expenditure account, Balance Sheet
• Details of income received (donations, grants, interest) and its source
• Details of income applied for charitable purposes with supporting bills
• Form 9A (if income not applied but intention to apply in next year)
• Form 10 (if income accumulated under Section 11(2) for specific purpose)
• Form 10B / 10BB audit report (mandatory for trusts with income above ₹5 lakh)
• FCRA registration (if foreign donations received)
• Form 26AS and AIS for the trust PAN

Consequences of Non-Compliance for Companies & Trusts

Companies and trusts face the most severe consequences for non-compliance among all taxpayer categories:

• Penalty under Section 234F — ₹5,000 late filing fee for ITR filed after the due date.
• Interest under Sections 234A, 234B & 234C — 1% per month on outstanding tax from due date, for shortfall in advance tax, and for deferment of advance tax instalments.
• Penalty under Section 271B — Failure to file tax audit report: 0.5% of turnover or ₹1.5 lakh, whichever is lower.
• MAT credit lapse — MAT credit (excess MAT paid over regular tax) is available for carry-forward for 15 years. Delayed or incorrect ITR filing can result in MAT credit not being recorded properly, leading to permanent loss.
• Trust registration cancellation — For trusts, failure to file ITR-7 or violation of application-of-income rules can lead to cancellation of 12A/12AB registration by the Principal Commissioner, making the entire corpus and income taxable. This is effectively an existential threat to the trust.
• Prosecution risk for companies — Persistent non-filing of ITR by a company can trigger prosecution under Section 276CC, with potential imprisonment for directors.