Provisions of the Income Tax Act Applicable to Public Limited Companies

Introduction
Public Limited Companies in India are governed by various provisions of the Income Tax Act, 1961, which outline their tax liabilities, compliance obligations, and applicable deductions and penalties. These provisions ensure that companies pay their fair share of taxes, maintain transparency in financial reporting, and contribute to national revenue. Due to their large scale and public accountability, Public Limited Companies are subject to more stringent tax norms and disclosures. This article briefly describes the key provisions of the Income Tax Act relevant to Public Limited Companies.

1. Corporate Tax Rates (Section 115BAA and Others)
Public Limited Companies are taxed on their income at specified corporate tax rates:

• 25% if turnover is up to ₹400 crore in the previous year.
  
• 30% for others, unless opting for concessional schemes.
  
• 22% under Section 115BAA (without exemptions).
  
• 15% under Section 115BAB (for new manufacturing companies).
  These rates are subject to surcharge and health and education cess.
  

2. Minimum Alternate Tax (MAT) – Section 115JB
Companies that have low or zero taxable income due to exemptions must pay MAT at 15% of book profits, plus surcharge and cess. However, companies opting for Section 115BAA or 115BAB are exempt from MAT.

3. Tax Deducted at Source (TDS) – Chapter XVII-B
Public Limited Companies are required to deduct TDS on payments such as:

• Salaries, contract fees, interest, rent, commission, and dividends.
  The deducted amount must be deposited with the government and reported in quarterly TDS returns.
  

4. Filing of Income Tax Returns – Section 139
Public Limited Companies must file their income tax return using Form ITR-6.

• The due date is usually October 31 of the assessment year.
  
• The return must be verified digitally and include audited financials.
  

5. Tax Audit – Section 44AB
If the company’s turnover exceeds ₹1 crore (or ₹10 crore if cash transactions are limited), it must get its accounts audited and submit a tax audit report in Form 3CA and 3CD by the return filing due date.

6. Advance Tax – Section 208
Public Limited Companies must pay advance tax in four installments if their tax liability exceeds ₹10,000 in a financial year. Interest is levied for defaults or shortfalls in payment under Sections 234B and 234C.

7. Transfer Pricing – Sections 92 to 92F
If a Public Limited Company enters into international or specified domestic transactions with related parties, it must comply with transfer pricing rules, maintain documentation, and submit a transfer pricing report in Form 3CEB.

8. Dividend Taxation – Section 194 and Others
While Dividend Distribution Tax (DDT) is abolished, Public Limited Companies must now deduct TDS under Section 194 when paying dividends to shareholders if the amount exceeds ₹5,000.

Conclusion
The Income Tax Act lays down comprehensive rules for the taxation and compliance of Public Limited Companies. These include corporate tax rates, MAT, TDS obligations, tax audit, return filing, and transfer pricing norms. Strict adherence to these provisions ensures legal compliance, minimizes tax risks, and enhances corporate credibility. Understanding and implementing these regulations is essential for the smooth financial management and growth of Public Limited Companies in India.

Hashtags

#IncomeTaxAct #PublicLimitedCompanies #TaxProvisions #CorporateTax #BusinessFinance #TaxCompliance #FinancialRegulations #CompanyTaxation #TaxPlanning #CorporateFinance #BusinessLaw #TaxDeductions #TaxLiabilities #FinancialReporting #TaxStrategies #PublicCompanies #CorporateGovernance #TaxObligations #BusinessGrowth #TaxEducation