Private Limited Company Compliance : A Practical Post-Incorporation Guide

CA RAMAKRISHNA SANJAY

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Congratulations! Incorporating your company is a huge milestone

"Incorporation is not the finish line—it is the starting point."

Once a company receives its Certificate of Incorporation (COI), it enters a regulated framework governed by the Companies Act, 2013.

Here is to-the-point guide on the mandatory post-incorporation steps for a Private Limited Company in India.

📅 Phase 1: Immediate Post-Incorporation (First 30 Days)

✔ Key Actions

• 🏦 Bank Account Opening
  Essential for operational readiness and capital infusion.

• 👥 First Board Meeting (Section 173)
  Must be conducted within 30 days
  Covers:

  • Appointment of auditor

  • Disclosure of interest

  • Adoption of initial resolutions

• 🧾 Appointment of First Auditor
  To be appointed by the Board within 30 days

• 📄 Issue of Share Certificates
  Must be issued within 60 days to subscribers

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🚨 Phase 2: Commencement of Business (Critical Compliance)

📌 INC-20A – Declaration of Commencement

This is a non-negotiable compliance checkpoint.

• Timeline: Within 180 days

• Pre-condition: Share capital must be deposited in company bank account

• Certification: Filed by a practicing professional

⚠ Risk Exposure

• Company penalty: up to ₹50,000

• Directors: ₹1,000 per day

• Potential strike-off by ROC

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🔁 Phase 3: Recurring Annual Compliances

Once operational, compliance becomes cyclical.

📊 1. DIR-3 KYC

• Applicable to all directors holding DIN

• Due Date: 30th September

• Impact of Delay: DIN deactivation + ₹5,000 fee

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📑 2. AOC-4 (Financial Statements)

• Filing of:

  • Balance Sheet

  • Profit & Loss Account

• Due Date: Within 30 days of AGM

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📘 3. MGT-7 / MGT-7A (Annual Return)

• Captures:

  • Shareholding pattern

  • Governance structure

• Due Date: Within 60 days of AGM

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💰 4. Income Tax Return (ITR-6)

• Due Date: Typically 31st October (audit cases)

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💡 Strategic Compliance Insights 

✔ GST Registration

✔ Statutory Registers

✔ Professional Tax (State-Specific)

📌 Conclusion

Compliance is not a regulatory burden.

A company that is compliant:

• Builds investor confidence

• Avoids legal disruption

• Scales sustainably

Wedding Gifts & Income Tax: Is Your Cash Gift Really Tax-Free?

 

Marriage is a grand celebration in India, and it’s a long-standing tradition for couples to receive blessings in the form of "Sagan" or cash gifts. 

But as the wedding bells fade and you look at your bank balance, a critical question arises: Does the Income Tax Department want a slice of your wedding cake? 🍰

If you are wondering whether those envelopes of cash are taxable or how to explain them to a tax officer, this guide is for you!

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✅ The Big Reveal: Is it Tax-Free?

Yes! Under Section 56(2)(x) of the Income Tax Act, any gift (cash, cheques, or property) received by an individual on the occasion of their marriage is 100% exempt from income tax. 💸✨

Unlike regular gifts where you might have to pay tax if the total exceeds ₹50,000, wedding gifts have no upper limit. Whether it is ₹5,000 or ₹5,00,000, if it’s for your wedding, it’s exempt!

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⚠️ The "Cash Trap" You Must Avoid

While the gift is tax-free, there is a hidden rule called Section 269ST that you need to watch out for.

• The ₹2 Lakh Rule: You should not accept ₹2,00,000 or more in cash from a single person in a single day or for a single occasion.

• The Risk: Even though it’s a wedding gift, if you take ₹2 lakh in cash from one person, you could be hit with a 100% penalty equal to the gift amount! 🚫

• The Solution: If a close relative wants to give you a large sum, ask them to use a Cheque, UPI, or Bank Transfer.

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📂 How to "Audit-Proof" Your Wedding Gifts

If the Assessing Officer (AO) ever asks, "Where did this money come from?" you need to be ready. Here is your Tax-Ready Checklist:

1. Keep the Invitation: Your wedding card is the primary proof of the "occasion." 💌

2. Maintain a Gift Diary: Note down the names of guests and the amounts they gave. It sounds tedious, but it’s a lifesaver during an audit! 📝

3. Deposit Promptly: Try to deposit the cash into your bank account within a few weeks of the wedding. This links the money directly to the event. 🏦

4. Gift Deeds for High Values: If you receive a large gift from a parent or sibling, a simple Gift Deed on a stamp paper acts as solid legal evidence.

5. Identify the Donor: For very large amounts, the AO may check if the person giving the gift actually has the "capacity" to give it.

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💡 Tips for Newlyweds

• Only for the Bride & Groom: This special tax exemption applies only to the couple. Gifts received by parents or siblings are subject to normal gift tax rules. 👰🤵

• Declare in ITR: It is always a good idea to mention large wedding gifts in the 'Exempt Income' section of your Income Tax Return. It shows you have nothing to hide!

Final Thoughts 💭

Wedding gifts are a beautiful start to your new life. By keeping simple records and following the cash limits, you can ensure your "happily ever after" isn't interrupted by a tax notice!

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