What is Form 29B: How to File, Applicability, Penalty, Filing Due Date, PDF Download

If you are running a business in India, you must know the prevailing tax laws of this country to avoid legal prosecutions. Business organisations failing to file the returns are liable to pay hefty penalties. Among the most mandatory IT filings in India, Form 29B is a crucial one for business organisations. 

According to the ITAT (Income Tax Appellate Tribunal) rule of July 2020, business expenditures and losses are different from each other. Moreover, as per Section 115JB of the Income Tax Act of 1961, you cannot expand your taxable income by adding your sustained loss. To note and declare your company’s profit, every business organisation needs to file Form 29B. Read this article to learn what is Form 29B, how to file it, and more!

What is Form 29B of the Income Tax Act?

Section 115JB of the Income Tax Act states that Form 29B is essential to assess your company’s book profits. With this form, you can calculate the exact book profit to claim the Minimum Alternate Tax (MAT) credit.  If your company is covered by Section 115JB, this form needs to be furnished by a Chartered Accountant. 

As a business holder, you need to compute the MAT and tax liability and pay both under tax provisions. Moreover, you must pay the MAT amount without fail if your ordinary tax amount is lower than the MAT. This is because the Income Tax law states that a company needs to pay the higher tax amount among the two. However, the Form 29B MAT amount depends on your company's book profit as reported in Form 29B. 

What is Minimum Alternate Tax (MAT)?

Sometimes, companies make a profit and distribute it to shareholders but pay little or no tax at all by utilizing income tax laws and provisions, such as deductions, exemptions, and more.

Companies must pay a fixed percentage of their profits as Minimum Alternative Tax (MAT). MAT applies to all companies, including foreign companies.

The tax rate is 15% of Book Profits plus 4% education cess plus a surcharge, if applicable, with effect from FY 2019-20. Prior to that, the rate was 18.5%.

Form 29B Applicability

Every Company where the income is less than 15% of the book profit is required to obtain a report from a Chartered Accountant in Form 29B. This report should be obtained and submitted one month before the due date for filing of return u/s 139(1) or along with the return of income furnished in response to a notice under Section 142(1)(i).

Company owners should take a look at the points below to understand the Form 29B applicability:

• As a company owner, you need to get a certificate from an authorised Chartered Accountant (CA) for Form 29B. It is required to verify the estimated book profits as per the Income Tax Act of 1961.
• Both the CA and taxpayer should have access to the e-filing portal through their respective IDs and passwords. Moreover, the appointed CA should have a valid Digital Signature Certificate (DSC), which should be registered on the IT e-Filing portal.
• While submitting Form 29B, companies must follow the government-approved format to avoid any mistake that can attract penalties. 
• As a company owner, you should appoint a chartered accountant from My CA service. The appointed CA will provide you with an audit report through Form 29B as per the Income Tax Act. However, the appointed CA may not always accept your request for an audit report, but if accepted, he needs to file Form 29B.
• Do not miss entering the information like your name. address, company PAN number, assessment year, etc., while filing Form 29B. You also need to mention the book profit amount of your company while filing this form.

How to File Form 29B?

Check out the following steps to know how to file Form 29B online:

• Log in to the official website of Income Tax India - www.incometaxindia.gov.in.
• Enter your ID and password and log in to the income tax e-filing portal.
• Search the e-file link from the dashboard.
• Click on ‘Income Tax Forms’ and then select ‘File Income Tax Forms’.
• Select ‘Form 29B’ from the list of form titles and enter the assessment year.
• Log in to My CA service and appoint a CA.
• Attach the required documents and click on ‘Proceed’.
• Your form will be delivered to the appointed chartered accountant (CA).
• You will receive a transaction ID Save the ID for future reference.

What is the Penalty if I Fail to File Form 29B?

According to Section 271BA, if you fail to obtain the audit report and file Form 29B before the due date, you will be liable to pay a hefty penalty. The penalty for late filing of Form 29B can be as high as Rs 1,00,000 in some cases. However, Section 273B states that if you can state an appropriate reason for failing to file the form on the due date, you are not liable for any penalty under Section 271 BA.

What is the Due Date for Filing Form 29B? 

As per Section 115JB of the Income Tax Act of 1961, every company should report its book profits for a particular assessment year in Form 29B. However, your report must be certified by a CA. You can file this form both online and offline at your convenience. 

The Form 29B due date depends on the notice you receive under Section 142(1). Moreover, you can submit the form with income returns one month before the return filing deadline as specified under Section 139(1).

Form 29B PDF

You can download Form 29B  in PDF format from the official website of Income Tax India. This form comprises three parts and an audit report: Part A, Part B, and Part C. Part A applies to every business organisation in India, but the applicability of Part B and Part C depends on specific conditions. 

Take a look at the different parts of the Form 29B of the Income Tax Act:

Part A

This part furnishes general details of the book profits of a company.

Part B/Part C

Part B contains details of the amount which is required to be increased/decreased as per sub-section (2A) of Section 115JB. Part C furnishes the amount which is required to be increased/decreased as per sub-section (2C) of the same section. 

Final Words

In India, every business organisation and company that maintains a book profit must pay MAT. The amount of book profit is stated in the audit report under Form 29B income tax rules. Thus, Form 29B is a crucial document for claiming MAT credit for the assessment year.