Income Tax Applicability

• An OPC is taxed as a domestic company under the Income Tax Act, 1961.
  
• It is required to pay tax at the applicable corporate tax rate, currently:
  
  • 22% under the new tax regime (Section 115BAA), subject to conditions.
    
  • 25% if the turnover is up to ₹400 crore (as per the previous financial year under the old regime).
    
• A surcharge and health & education cess (4%) are also added to the tax amount.
  
• OPCs do not get the benefit of individual slab rates, even though they are owned by a single person.
  
• The income is taxed at the company level; dividends may be taxed in the hands of the member.
  

Advance Tax and Filing Obligations

• OPCs are required to pay advance tax if the tax liability exceeds ₹10,000 in a year.
  
• Advance tax must be paid in four instalments (June, September, December, March).
  
• Annual income tax returns must be filed using Form ITR-6, applicable for companies other than those claiming exemption under Section 11.
  
• Filing is mandatory even if the OPC makes a loss or has no income.
  
• Non-compliance with advance tax or return filing leads to interest and penalty.
  

Tax Deducted at Source (TDS)

• OPCs must deduct TDS when making certain payments, such as:
  
  • Salary
    
  • Professional fees
    
  • Rent
    
  • Contractor payments
    
• TDS must be deposited with the government within the due dates.
  
• Quarterly TDS returns must be filed using forms like 24Q and 26Q.
  
• A TAN (Tax Dedication and Collection Account Number) must be obtained for TDS compliance.
  
• Delayed payments or returns attract interest, penalties, and disallowance of expenses.
  

Goods and Services Tax (GST)

• If the OPC’s aggregate turnover exceeds ₹20 lakh (₹10 lakh in special category states), GST registration is mandatory.
  
• Even below the threshold, registration is required for interstate supply or e-commerce operations.
  
• GST returns must be filed monthly or quarterly, depending on the scheme chosen.
  
• GST collected must be deposited and returns filed on time (e.g., GSTR-1, GSTR-3B).
  
• Input Tax Credit (ITC) can be claimed on eligible purchases used in business operations.
  

Other Statutory Tax Compliances

• OPCs may also need to comply with:
  
  • Professional Tax (where applicable, based on state laws)
    
  • Employees’ Provident Fund (EPF) and ESIC, if employing staff and exceeding thresholds
    
• Maintenance of proper tax records, challans, and reconciliations is mandatory.
  
• All tax filings and payments must be done through the Income Tax and GST portals.
  
• Books of accounts must be maintained by the Companies Act and Income Tax rules.