GST
Free, expert-written guides on GST, Income Tax, TDS and company compliance for Indian businesses.
Try a different search term or category.
GST registration is mandatory for most businesses in India once they cross the turnover threshold — or immediately for certain categories regardless of turnover. Here is a complete guide to understanding who needs to register and how.
GST registration is mandatory if:
For a Private Limited Company:
For a Proprietorship: PAN, Aadhaar, address proof, bank details, and business address proof.
Once approved, you receive a GST Registration Certificate (Form REG-06) with your 15-digit GSTIN. Display this at your principal place of business as required by law.
Even if your turnover is below the threshold, you can voluntarily register for GST. This is beneficial if your customers are GST-registered businesses who want to claim Input Tax Credit from you.
Operating without GST registration when mandatory attracts a penalty of ₹10,000 or 10% of tax due, whichever is higher. In cases of deliberate fraud, the penalty can be 100% of tax due.
Finanezy handles GST registration and all ongoing compliance for businesses across Bengaluru. Book a free consultation or call +91 8660150388.
Every GST-registered business in India needs to file at least two returns every month — GSTR-1 and GSTR-3B. While both are GST returns, they serve entirely different purposes. Here is everything you need to know.
GSTR-1 is your outward supply return. In it, you declare all the sales invoices you issued during the month — B2B invoices (with GSTIN), B2C invoices (without GSTIN), credit notes, debit notes, and advances received.
Your customers use GSTR-1 data to verify their Input Tax Credit (ITC) in GSTR-2B. If you don't file GSTR-1 correctly, your customers cannot claim ITC on purchases from you — which can cost you business.
Due date: 11th of the following month
GSTR-3B is your monthly summary return with tax payment. Here you declare total outward tax, claim Input Tax Credit, and pay the net tax liability to the government. Unlike GSTR-1, GSTR-3B involves an actual payment.
Due date: 20th of the following month (20th, 22nd, or 24th depending on state)
| Feature | GSTR-1 | GSTR-3B |
|---|---|---|
| Purpose | Report sales invoices | Summary return + tax payment |
| Due Date | 11th of next month | 20th of next month |
| Invoice details | Yes — invoice-level data | No — consolidated summary |
| Tax payment | No | Yes — mandatory |
| Affects ITC of customers | Yes | No |
| Can be amended? | Yes — in next month's return | No |
Businesses with turnover up to ₹5 crore can opt for the QRMP (Quarterly Return Monthly Payment) scheme. Under QRMP, GSTR-1 is filed quarterly but tax is paid monthly through a fixed sum (35% of previous quarter's liability) or self-assessment payment.
QRMP taxpayers can use the IFF in months 1 and 2 of a quarter to upload B2B invoices so their customers can claim ITC immediately without waiting for the quarterly GSTR-1.
Finanezy files GSTR-1, GSTR-3B, and all GST returns for businesses across Karnataka. Book a free consultation or call +91 8660150388.
If you're a quarterly GST filer under the QRMP scheme, your customers face a problem — they have to wait until the end of the quarter to see your invoices in GSTR-2B and claim Input Tax Credit. The IFF was introduced to solve exactly this problem.
QRMP stands for Quarterly Return Monthly Payment. Businesses with annual aggregate turnover up to ₹5 crore can opt for this scheme and file GSTR-1 quarterly instead of monthly, while continuing to pay tax every month.
IFF is an optional facility available to QRMP taxpayers in the first two months of each quarter (not in the third month). It allows quarterly filers to upload their B2B invoices so that their customers' GSTR-2B is updated and they can claim ITC in the same month — without waiting for the quarterly GSTR-1.
Yes, if you have regular B2B customers who are monthly GST filers. Not filing IFF means your customers see a mismatch between their GSTR-2A (real-time) and GSTR-2B (locked) — and they may prefer to work with suppliers who are monthly filers to avoid ITC delays.
| Feature | IFF (QRMP) | Monthly GSTR-1 |
|---|---|---|
| Filing frequency | Monthly (optional) | Monthly (mandatory) |
| B2B invoices | Yes | Yes |
| B2C invoices | No | Yes |
| Due date | 13th | 11th |
Finanezy manages GSTR-1, IFF, GSTR-3B and all GST filings for businesses across Karnataka. Book a free consultation or call +91 8660150388.
One of the most confusing aspects of GST compliance for businesses is understanding the difference between GSTR-2A and GSTR-2B — both of which are auto-populated statements showing Input Tax Credit available to you. Here is a clear explanation.
GSTR-2A is a dynamic, real-time statement that shows all the invoices your suppliers have uploaded against your GSTIN in their GSTR-1 or IFF filings. It updates continuously throughout the month as your suppliers file.
GSTR-2B is a static, locked statement generated on the 14th of every month. It shows the ITC available to you based on your suppliers' GSTR-1/IFF filings up to the 13th. Unlike GSTR-2A, GSTR-2B does not change after generation.
| Feature | GSTR-2A | GSTR-2B |
|---|---|---|
| Nature | Dynamic (updates daily) | Static (generated on 14th) |
| Basis for ITC claim | No | Yes |
| When generated | Continuously | 14th of each month |
| Includes QRMP suppliers | Yes (when they file) | Yes (for Month 1 & 2 via IFF, Month 3 via quarterly GSTR-1) |
Under Rule 36(4) of CGST Rules, you can only claim ITC in GSTR-3B to the extent it appears in your GSTR-2B. ITC on invoices not reflected in GSTR-2B cannot be claimed until the supplier files. This makes reconciliation between your books and GSTR-2B critical every month.
Finanezy performs monthly ITC reconciliation for all clients, ensuring maximum ITC claims and zero compliance risk. Book a free consultation or call +91 8660150388.
The GST Composition Scheme is a simplified tax scheme designed for small businesses. Instead of the standard GST system with monthly returns and input tax credit, composition dealers pay a flat rate on turnover and file just two forms — CMP-08 and GSTR-4.
Businesses with aggregate turnover up to ₹1.5 crore (₹75 lakhs for special category states) can opt for the composition scheme. Service providers can opt if turnover is up to ₹50 lakhs under the special composition scheme for services.
The following cannot opt for composition:
| Type of Business | GST Rate |
|---|---|
| Manufacturers | 1% of turnover (0.5% CGST + 0.5% SGST) |
| Restaurants (not serving alcohol) | 5% of turnover |
| Other traders (goods) | 1% of turnover |
| Service providers (special scheme) | 6% of turnover (3% CGST + 3% SGST) |
CMP-08 is a quarterly challan-cum-statement that composition taxpayers file to pay their GST liability for each quarter.
GSTR-4 is the annual return for composition dealers, filed once a year. It consolidates all quarterly CMP-08 payments and provides a full-year picture of turnover and tax paid.
Finanezy handles both standard GST and composition scheme compliance for businesses across Karnataka. Book a free consultation or call +91 8660150388.
Maintaining detailed books of accounts is a significant burden for small businesses and independent professionals. The presumptive taxation scheme under Sections 44AD and 44ADA offers relief — you pay tax on an estimated income percentage without needing full bookkeeping.
Under presumptive taxation, the government presumes a fixed percentage of your gross turnover or receipts to be your taxable income. You pay tax on this presumed income without needing to prove your actual expenses or maintain a detailed P&L.
Section 44AD applies to resident individuals, HUFs, and partnership firms (excluding LLPs) engaged in any business except certain commission-based and agency businesses.
Section 44ADA applies to specified professionals — doctors, lawyers, architects, engineers, accountants, interior designers, and technical consultants.
Opt for 44AD/44ADA if:
Don't opt if:
Important: Once you opt out of the presumptive scheme, you cannot re-enter it for the next 5 years. And if you declare income lower than the presumptive rate without opting out, your case may be subject to audit.
Taxpayers using Section 44AD or 44ADA file using ITR-4 (Sugam) — a simplified ITR form designed specifically for presumptive taxpayers.
Finanezy handles income tax planning and filing for all types of taxpayers. Book a free consultation or call +91 8660150388.
Since the Finance Act 2022 introduced Section 115BBH, cryptocurrency and virtual digital assets (VDAs) are taxed at a flat 30% rate in India. If you bought, sold, or received crypto in FY 2024-25, here is how to report it correctly.
Under Section 115BBH:
Under Section 194S, if you receive crypto worth more than ₹10,000 in a year (₹50,000 for specified persons) from a resident buyer, the buyer must deduct 1% TDS. This TDS is reflected in your Form 26AS and can be claimed as a credit when filing ITR.
The ITR now has a dedicated Schedule VDA where you report:
Crypto received as payment for services, via mining, staking rewards, or airdrops is taxed at the fair market value on the date of receipt — first as income, then as cost of acquisition for any future sale.
Finanezy handles complex income tax filing including crypto, F&O, and foreign income. Book a free consultation or call +91 8660150388.
If you trade in Futures and Options (F&O) on NSE or BSE, the Income Tax Act treats this as business income — not capital gains. This has significant implications for how you file your ITR and what deductions you can claim.
F&O trading is classified as non-speculative business income under Section 43(5). This means:
| Feature | Intraday Equity | F&O |
|---|---|---|
| Tax classification | Speculative business income | Non-speculative business income |
| Set-off of losses | Only against speculative income | Against any business income |
| Carry forward | 4 years | 8 years |
| Slab rate tax | Yes | Yes |
Tax audit under Section 44AB is required if:
Important: F&O turnover is calculated as the sum of absolute profit and loss on each contract — NOT just the final net profit/loss. This is often much higher than traders expect.
F&O traders must use ITR-3 (for individuals/HUFs with income from business or profession). You cannot use ITR-1 or ITR-2 if you have F&O income.
Yes — F&O losses (being non-speculative business losses) can be set off against salary income in the same financial year. This is a significant tax planning opportunity for salaried individuals who also trade in F&O.
Finanezy handles complex ITR filings including F&O, crypto, and capital gains for individuals and businesses. Book a free consultation or call +91 8660150388.
A tax audit under Section 44AB of the Income Tax Act is a mandatory audit by a Chartered Accountant for businesses and professionals whose income exceeds specified thresholds. Here is everything you need to know.
A tax audit is mandatory in the following cases:
Note: If the tax audit due date is 30th September, your ITR must also be filed by 31st October (audit cases).
Failure to get a tax audit done or file it on time attracts a penalty of 0.5% of turnover or ₹1,50,000 — whichever is lower. This penalty can be waived if there is a reasonable cause for non-compliance.
The 44-clause Form 3CD requires the CA to report on:
These are two different audits. A statutory audit (under Companies Act) is mandatory for all companies and LLPs. A tax audit is mandatory only when income thresholds are crossed. Both are done by CAs but serve different purposes and produce different reports.
Finanezy provides tax audit services under Section 44AB for businesses, professionals, and F&O traders across Bengaluru. Book a free consultation or call +91 8660150388.
When starting a business in India, one of the first decisions is the legal structure. Private Limited Company and Limited Liability Partnership (LLP) are the two most popular choices for startups and growing businesses. Here is a detailed comparison.
A Private Limited Company (Pvt Ltd) is a separate legal entity registered under the Companies Act 2013. It is the preferred structure for businesses looking to raise funding, scale operations, or work with larger corporate clients.
An LLP combines the flexibility of a partnership with the benefits of limited liability. It is registered under the LLP Act 2008 and is popular among professionals, small businesses, and those who want a simpler compliance structure.
| Feature | Private Limited Company | LLP |
|---|---|---|
| Governing law | Companies Act 2013 | LLP Act 2008 |
| Minimum members | 2 directors, 2 shareholders | 2 designated partners |
| Maximum members | 200 shareholders | No limit |
| Liability | Limited to shares | Limited to contribution |
| Funding/equity | Can issue shares, accept angel/VC funding | Cannot issue shares |
| Annual compliance | Higher — AOC-4, MGT-7, Board meetings, etc. | Lower — Form 11, Form 8 |
| Corporate tax rate | 22% (new regime) or 30% | 30% + surcharge |
| Dividend tax | Applicable on distribution | No dividend distribution tax |
| Startup recognition | Eligible for DPIIT recognition | Eligible for DPIIT recognition |
| Foreign investment | FDI allowed under most routes | FDI restricted — only in select sectors |
| Statutory audit | Mandatory for all companies | Mandatory only if turnover > ₹40L or contribution > ₹25L |
Both have similar government fees for registration. However, ongoing compliance costs for a Pvt Ltd are typically ₹15,000-₹40,000 per year higher than an LLP due to mandatory Board meetings, more ROC filings, and statutory audit requirements.
Finanezy handles Private Limited Company and LLP incorporation across India, including all post-incorporation compliance. Book a free consultation or call +91 8660150388.
A One Person Company (OPC) is a type of private limited company introduced under the Companies Act 2013 that allows a single person to run a company with limited liability. It bridges the gap between a sole proprietorship and a private limited company.
An OPC must be converted to a Private Limited Company if:
Note: The Finance Act 2021 removed the 2-year lock-in, so OPCs can now voluntarily convert to Pvt Ltd anytime.
| Feature | OPC | Sole Proprietorship |
|---|---|---|
| Legal identity | Separate legal entity | No separate identity |
| Liability | Limited to capital | Unlimited — personal assets at risk |
| Compliance | ROC filings required | Minimal |
| Credibility | Higher with clients/banks | Lower |
| Tax rate | Corporate rates (22%/30%) | Individual slab rates |
Finanezy handles OPC registration and all ongoing compliance across India. Book a free consultation or call +91 8660150388.
A Section 8 Company (formerly Section 25 under the old Companies Act) is a not-for-profit company formed for promoting charitable, educational, religious, scientific, or social welfare objectives. It is one of the most credible NGO structures in India.
A Section 8 Company is a company where profits (if any) are applied towards promoting its objects, and no dividend is paid to members. It is licensed by the Central Government through the Ministry of Corporate Affairs.
| Feature | Section 8 Company | Society | Trust |
|---|---|---|---|
| Governed by | Companies Act 2013 | Societies Registration Act | Indian Trusts Act / State Acts |
| Credibility | Highest | Medium | Medium |
| CSR eligibility | Yes | Yes | Yes |
| Foreign funding (FCRA) | Eligible | Eligible | Eligible |
| Compliance level | High (MCA filings) | Medium | Low to medium |
| Modification of rules | Easier | Difficult | Very difficult |
Finanezy handles Section 8 Company registration, 12A/80G applications, and ongoing compliance for NGOs. Book a free consultation or call +91 8660150388.
Many businesses in India operate as either a traditional partnership firm or a Limited Liability Partnership (LLP). While both involve multiple partners sharing profits and management, they differ significantly in terms of liability, compliance burden, and legal standing.
A partnership firm is governed by the Indian Partnership Act 1932. It is one of the simplest business structures in India — formed by a Partnership Deed, with minimal registration requirements.
An LLP is governed by the LLP Act 2008 and is registered with the Ministry of Corporate Affairs. It combines partnership flexibility with corporate limited liability.
| Feature | Partnership Firm | LLP |
|---|---|---|
| Liability of partners | Unlimited (personal assets at risk) | Limited to agreed contribution |
| Legal entity | Not separate | Separate legal entity |
| Registration | Optional (state RoF) | Mandatory (MCA) |
| Compliance | Very minimal | Annual MCA filings required |
| Statutory audit | Only if turnover > ₹1Cr (tax audit) | If turnover > ₹40L or contribution > ₹25L |
| Foreign investment | Not permitted | Permitted (limited sectors) |
| Perpetual succession | No — dissolves if partner exits | Yes — continues despite partner changes |
| Bank credit | Harder to obtain | Easier — more credibility |
Both partnership firms and LLPs are taxed at a flat 30% on their net income (plus surcharge and cess). Partner remuneration up to specified limits is deductible as an expense. Partners are taxed on their share of profit, which is exempt in their hands to avoid double taxation.
Finanezy handles Partnership Firm registration, LLP incorporation, and all post-registration compliance. Book a free consultation or call +91 8660150388.
The Karnataka Shops and Commercial Establishments Act 1961 governs the working conditions of employees in shops, commercial establishments, hotels, restaurants, and other businesses across Karnataka. Registration under this Act is mandatory for most businesses in Bengaluru.
Any establishment in Karnataka engaged in trade, commerce, or services must register, including:
Home offices and residences used primarily as a workplace are also covered.
Once registered, employers must comply with:
The registration certificate must be renewed annually before 31st December. Late renewal attracts a penalty. The renewal is done through the same Seva Sindhu portal.
Operating without Shops Act registration is an offence. First offence: fine up to ₹1,000. Subsequent offence: ₹1,000-₹2,000 per day of non-compliance.
Finanezy handles Shops Act registration, renewal, and all labour law compliance for businesses in Karnataka. Book a free consultation or call +91 8660150388.
Provident Fund (PF) compliance is mandatory for all establishments with 20 or more employees in India. Here is a complete guide to PF registration, monthly ECR filing, contribution rates, and the annual forms employers need to file.
PF registration under the Employees' Provident Fund and Miscellaneous Provisions Act 1952 is mandatory when:
| Contribution | Rate | Account |
|---|---|---|
| Employee contribution | 12% of basic + DA | EPF Account |
| Employer contribution (EPF) | 3.67% of basic + DA | EPF Account |
| Employer contribution (EPS) | 8.33% of basic + DA (max ₹1,250) | Pension Account |
| Employer contribution (EDLI) | 0.5% of basic + DA (max ₹75) | Insurance Fund |
| Administrative charges | 0.5% of wages (min ₹500/month) | — |
ECR (Electronic Challan cum Return) is the monthly PF return that employers must file on the EPFO unified portal (unifiedportal-emp.epfindia.gov.in).
Steps to file ECR:
Employers must file annual PF returns within 30 days of the close of each financial year:
Note: Since ECR filing started, these forms are largely auto-generated. However, employers must ensure the annual data reconciles with monthly ECRs.
For employees whose basic + DA exceeds ₹15,000, PF contribution is mandatory only on ₹15,000. The employee can voluntarily contribute on the higher actual salary. The employer is not obligated to match the voluntary excess.
Finanezy manages monthly ECR filing, annual returns, and all PF compliance for businesses across Karnataka. Book a free consultation or call +91 8660150388.
ESI (Employee State Insurance) is a social insurance scheme that provides health, disability, and other benefits to employees and their families. Here is everything employers in India need to know about registration, contributions, and returns.
ESI registration under the ESI Act 1948 is mandatory for establishments with:
| Contributor | Rate |
|---|---|
| Employer | 3.25% of gross wages |
| Employee | 0.75% of gross wages |
| New establishments (first 3 years) | 0% employee + 0% employer (if below ₹137/month wages) |
Employers must deposit ESI contributions by the 15th of every following month. Filing is done on the ESIC employer portal (esic.in).
ESI returns are filed half-yearly (not monthly):
The return must include details of all employees covered, wages paid, and contributions made.
These annual forms must be submitted to the ESIC Regional/Local Office within 30 days of the close of the contribution period.
Failure to register, file returns, or pay contributions on time attracts:
Finanezy manages ESI registration, monthly challans, half-yearly returns, and annual Form T & U filings for businesses across Karnataka. Book a free consultation or call +91 8660150388.
Choosing the right accounting software for your business in India is a crucial decision. Three platforms dominate the market — Tally Prime, Zoho Books, and QuickBooks. Here is a detailed comparison based on what Indian businesses actually need.
Tally has been the dominant accounting software in India for over 30 years. Tally Prime is the latest version with a significantly improved interface while retaining the comprehensive accounting and compliance features that Indian accountants know inside out.
Best for: Manufacturing, trading, businesses with complex inventory, businesses in Tier 2/3 cities where most CAs prefer Tally.
Pricing: ₹18,000/year (single user) to ₹54,000/year (multi-user Silver) to ₹1,80,000/year (Gold — unlimited users)
Strengths: Works offline, extremely flexible, best inventory management, most Indian CAs know it, direct e-filing integration for GST and TDS
Weaknesses: Not cloud-native, interface can be complex for non-accountants, mobile app is limited
Zoho Books is a cloud-based accounting platform designed for modern businesses. It integrates seamlessly with the wider Zoho ecosystem (Zoho CRM, Zoho Payroll, Zoho Inventory, etc.).
Best for: Startups, IT companies, service businesses, businesses wanting real-time access from multiple locations, companies using Zoho CRM.
Pricing: Free (up to ₹50L turnover, 1 user) to ₹799-₹2,999/month depending on features
Strengths: True cloud — access from any device, automatic bank feeds, excellent GST compliance, built-in payroll (Zoho Payroll), beautiful dashboards, great client portal
Weaknesses: Requires internet, can get expensive for larger teams, inventory is less powerful than Tally
QuickBooks is the global leader in small business accounting. The India version supports GST and is a good choice for businesses with international operations or foreign parent companies.
Best for: Businesses with US/global parent companies, companies needing consolidated reporting, international subsidiaries with India operations.
Pricing: Varies — typically ₹500-₹2,000/month depending on plan
Strengths: Widely used globally, excellent reports, easy to use, good for multicurrency businesses
Weaknesses: GST compliance less comprehensive than Indian-native software, limited ROC/TDS support
| Feature | Tally Prime | Zoho Books | QuickBooks |
|---|---|---|---|
| Cloud/Offline | Primarily offline | Cloud | Cloud |
| GST compliance | Excellent | Excellent | Good |
| TDS management | Excellent | Good | Limited |
| Inventory | Best in class | Good | Basic |
| Payroll integration | Via add-on | Zoho Payroll | Via add-on |
| Mobile app | Basic | Excellent | Good |
| Best for | Manufacturing/trading | Services/startups | International companies |
Xero is another cloud platform popular with international businesses, professional services firms, and companies with Australian, UK, or New Zealand parent companies. It has good Indian GST support and an excellent ecosystem of third-party add-ons.
Finanezy sets up, migrates, and manages bookkeeping on Tally, Zoho Books, QuickBooks, and Xero. Book a free consultation or call +91 8660150388.
Good bookkeeping isn't just about year-end filing — it's a monthly discipline that keeps your business financially healthy and compliance-ready. Here is a practical monthly checklist for small business owners in India.
Finanezy handles complete monthly bookkeeping for businesses across Bengaluru on Tally, Zoho Books, QuickBooks, or any platform you prefer. Book a free consultation or call +91 8660150388.
A Digital Signature Certificate (DSC) is the electronic equivalent of a physical signature — it authenticates the identity of the person signing electronic documents. In India, DSCs are mandatory for a wide range of government filings including MCA, GST, income tax, and many others.
DSCs are required for:
Issued to a specific individual in their personal capacity. Used for personal income tax filing, signing personal documents, and any filing where the individual acts in their own name.
Issued to an individual acting as an authorised representative of an organisation. Shows both the person's name AND the organisation name.
Example: "Arjun Singh, Finanezy Business Solutions Pvt Ltd"
For foreign nationals who are directors of Indian companies or need to sign Indian legal/government documents.
India now only uses Class 3 DSC for all purposes (Class 1 and Class 2 were discontinued in 2021). Class 3 provides the highest level of assurance and requires in-person or video verification.
DSCs are valid for 1 or 2 years. After expiry, they cannot be renewed — a new DSC must be obtained. Plan renewal at least 30 days before expiry to avoid disruption to filings.
Finanezy assists with Individual, Organisational, and Foreign National DSC procurement and registration on all government portals. Book a free consultation or call +91 8660150388.
GST audits and scrutiny notices are becoming increasingly common as the GST department uses data analytics to identify mismatches. Being prepared can mean the difference between a smooth audit and significant penalties. Here is what you need to know.
The GST officer scrutinises your filed returns and sends a notice if they find discrepancies. Common triggers include:
The GST Commissioner can order an audit of any registered person. This is a physical audit where a GST audit team visits your business premises and examines your books, records, and accounts.
Where the department suspects the declared value of supply or ITC is understated/overstated, they can direct a Chartered Accountant or Cost Accountant to conduct a special audit.
The annual return is cross-verified with monthly returns. Differences between GSTR-9 and monthly returns trigger scrutiny.
Finanezy handles GST audit support, notice responses, and representation before GST authorities. Book a free consultation or call +91 8660150388.
Running a private limited company in India comes with a set of mandatory annual filings with the Ministry of Corporate Affairs (MCA). Missing these deadlines attracts significant penalties. Here is your complete MCA compliance calendar.
| Form | Purpose | Typical Due Date |
|---|---|---|
| DIR-3 KYC | Director KYC | 30th September |
| AGM | Annual General Meeting | 30th September |
| ADT-1 | Auditor appointment | ~15th October |
| AOC-4 | Financial statements | ~29th October |
| MGT-7 | Annual return | ~28th November |
| MSME-1 (H2) | MSME payments | 31st October |
| MSME-1 (H1) | MSME payments | 30th April |
MCA late filing fees accrue at ₹200 per day per form — with no upper cap. A single form filed 100 days late costs ₹20,000. With 3-4 forms all filed late, penalties of ₹50,000-₹1,00,000+ are common. Don't delay.
Finanezy handles all MCA annual filings, Board meeting documentation, and ROC compliance for private limited companies across India. Book a free consultation or call +91 8660150388.
DIR-3 KYC is an annual compliance requirement under the Companies Act 2013 for every person holding a Director Identification Number (DIN). It must be filed by 30th September every year without exception.
DIR-3 KYC is the Know Your Customer (KYC) process for directors. The MCA introduced this to maintain updated contact information for all DIN holders and prevent misuse of deactivated or unused DINs. Every individual who was allotted a DIN on or before 31st March of the current year must file DIR-3 KYC by 30th September.
Use the full eForm if:
This requires OTP verification on both your mobile and email, and must be digitally signed by the director using their DSC.
If nothing has changed from the previous year, directors can use the simplified Web KYC on the MCA portal. Just login with your credentials and confirm via OTP on your registered mobile and email.
30th September every year — no extensions are typically granted.
If DIR-3 KYC is not filed by 30th September:
If a company has only 2 directors and both DINs get deactivated due to non-filing of DIR-3 KYC, the company literally cannot file any MCA form — including AOC-4 and MGT-7 — until DINs are reactivated. This triggers a cascade of late filing penalties across all forms.
Finanezy files DIR-3 KYC for all directors of client companies before the deadline every year. Book a free consultation or call +91 8660150388.
Many business owners are confused about the difference between a statutory audit and a tax audit. Both involve a Chartered Accountant reviewing your books, but they have completely different purposes, legal bases, and reporting requirements.
A statutory audit is mandated by the Companies Act 2013 for all registered companies and LLPs (above specified thresholds). Its purpose is to give shareholders and stakeholders an independent opinion on whether the financial statements show a true and fair view.
A tax audit under Section 44AB of the Income Tax Act is not about giving an opinion on financial statements — it is about verifying specific tax-relevant information and reporting it to the Income Tax Department.
| Feature | Statutory Audit | Tax Audit |
|---|---|---|
| Governed by | Companies Act | Income Tax Act |
| Purpose | True & fair view of financials | Tax-specific verification |
| Who must do it | All companies & some LLPs | Based on turnover thresholds |
| Report format | Auditor's Report per SA 700 | Form 3CA/3CB + Form 3CD |
| Recipient | Shareholders / public | Income Tax Department |
| Mandatory for sole proprietor | No | Yes (if turnover > ₹1Cr) |
Yes — and for most companies, the same CA firm performs both the statutory audit and the tax audit. This is efficient since the same books are being reviewed. However, the auditor must maintain independence and issue separate reports for each.
GST audit (Form GSTR-9C) is a third type of audit — a reconciliation between your GST returns and your audited financial statements. It is filed along with GSTR-9 and requires a CA or CMA to certify the reconciliation.
Finanezy provides statutory audit, tax audit, and GSTR-9C services for private limited companies, LLPs, and large businesses across Bengaluru. Book a free consultation or call +91 8660150388.