Understanding the Form 29B of the Income Tax Act in India

Form 29B is considered a significant audit report. It is a report as per Section 115JB of the Income Tax Act, 1961. A Chartered Accountant issues this report. Many people struggle with Minimum Alternate Tax (MAT) compliance. So, this form helps companies to certify their book profits. This applies to companies with high book profits but low taxable income. It confirms an accurate tax computation. This also allows to claim MAT credit. In this blog, you will get guidance on Form 29B.

What is Form 29B?

Form 29B refers to a mandatory audit report for companies. This form generally comes under Section 115JB of the Income Tax Act, 1961. It allows companies to calculate proper book profits. This also allows for claiming a Minimum Alternate Tax (MAT) credit for the official purpose. This report is issued by a Chartered Accountant. You can file this form through the official Income Tax Department's e-Filing portal.

Purpose of Form 29B

Form 29B acts as a compulsory audit report for companies. A Chartered Accountant (CA) generally issues this report. It certifies the "book profits" of a company under Section 115JB of the Income Tax Act, 1961.

Here is a detailed explanation of the key purposes:

a) MAT Calculation

Companies with this form will be able to calculate the MAT effectively. The full name of MAT is Minimum Alternate Tax. This means the company computes their book profits. This can lead to the 15% MAT rate (plus surcharge/cess).

b) Compliance

This mainly verifies changes to book profits according to Section 115JB(2A) and 115JB(2C).

c) Claiming Credit

Companies will be able to claim and carry MAT credit. This will be applicable when their regular tax liability is lower than the MAT.

e) Submission Requirement

You need to submit it electronically. The submission can be done through the Income Tax Department. Form 29B must be filed on or before the due date of ITR under Section 139(1) for audit cases.

What is meant by the Minimum Alternate Tax (MAT)?

Minimum Alternate Tax (MAT) is meant by an Indian tax provision. It is stated as per the Section 115JB of the Income Tax Act, 1961. It allows companies to make a payment of a minimum tax on their substantial "book profits." It also applies even if they can get lower taxable income. The cause of lower income is the deductions of exemptions. This is considered as a tax floor that has 15% of book profit plus cess/surcharge. This helps to make profit-making companies for revenue. It also uses leveraging incentives to reduce tax avoidance. Thus, companies calculate both their normal tax and the MAT liability. They make a payment of the higher amount between these two.

Who Must File Form 29B?

Every company that has an income of less than 15% of their book profit. It is mainly starts from the year 2020-21. So, these companies must file Form 29B. This report need to be submitted one month before the due date for filing of return u/s 139(1). They can also file it with the income return furnished in response to a notice under Section 142(1)(i).

What are the conditions applicable for Form 29B?

Listed below are the conditions applicable for Form 29B:

a) A company owner must get a certificate for this form. They can get it from an authorized Chartered Accountant. They must also check the estimated book profits according to the Income Tax Act of 1961.

b) Both the CA and the taxpayer should be able to use the e-filing portal with their own IDs and passwords. A chartered accountant need to have a valid Digital Signature Certificate (DSC). The registration can be done through the official Income Tax Department's e-filing portal.

c) Companies need to follow the government-approved format during the submission of Form 29B. This will help to reduce the issues for penalties.

d) A company owner needs to appoint a chartered accountant from My CA service. Then, the CA will give them a chartered accountant from "My CA service". The chosen CA might not always agree to their request for an audit report. But if they do it, they must submit Form 29B.

e) As a company owner, you must put the required information during filing Form 29B. The information can include:

• Name

• Address

• Company PAN number

• Assessment Year

• Other required details

You must also mention the book profit amount of the company.

Due Date for Filing Form 29B

The due date for filing Form 29B is one month before the due date of the income tax return. The date will be 31st October. This is specified to the Section 115JB of the Income Tax Act of 1961. This applies to the particular assessment year. The report needs to be certified by a CA. As a company owner, you can file it and submit it on the official Income Tax Portal. Thus, the date is connected to the tax audit report deadline. This is usually one month before the due of ITR.

Steps to File Form 29B

Below are the steps to file this form:

Step 1: Log in

Firstly, you must go to the official Income Tax Department e-filing portal

Step 2: Assess the portal

This step allows you to put in your user ID and password. Then, you will be able to access this income tax e-filing portal.

Step 3: E-file link

On the dashboard, you must search the e-file link.

Step 4: Navigate

Then, you should click on the "Income Tax Forms" option. Next, you can proceed by choosing the "File Income Tax Forms" on the dashboard.  

Step 5: Select Form

This step allows you to select the "Form 29B". You can select it from the list of form titles. Then, you need to enter the assessment year.

Step 6: Assign CA

You must log in to the "My CA service." This will allow you to appoint a CA. Thus, you must confirm that the CA must have a valid DSC from the portal.

Step 7: Submit to CA and attachments documents.

In this step, you need to put the assessment year and submit the required documents. Then, you need to click on the "Proceed" button.

Step 8: CA verification

The chosen chartered accountant (CA) will get your form.

Step 9: Final Acceptance

In the final step, you will get a transaction ID. This record should be maintained for future verification.

What is Form 29B PDF?

The Income Tax Department portal allows you to download the Form 29B in a PDF format. There are three parts of this form. The three parts are:

Part A

Part A contains the general details regarding the book profits of a company. This suits to every business organization in India.

Part B and Part C

Part B consists of the details of the amount. This amount needs to be increased or decreased according to sub-section (2A) of Section 115JB. On the other hand, Part C shows the amount that must be increased or decreased. This is according to subsection (2C) of the same section. Thus, these parts are based on the specific conditions.

Penalties for Not Filing the form

In the case of a business owner failing to get the audit report and file this form before the due date, it can lead to penalties. This is stated as per the Section 271BA. They have to pay the penalty amount of up to Rs 1, 00,000 for not filing in some cases. Thus, as per the Section 273B if you have a good reason for not filing the form on time, you do not have to pay penalty. This penalty is under Section 271 BA.

Conclusion

Form 29B is an essential audit report under Section 115JB for companies in India. This is beneficial for companies with accurate Minimum Alternate Tax (MAT) computation. A chartered accountant certifies the book profits. This allows compliance and brings valuable MAT credit. This form helps to reduce the unwanted tax scrutiny. You can easily file it through the official Income Tax portal. Filing this form also helps to reduce penalties. If you have any queries about filing this form, get in touch with Online Legal India.

FAQ

Q1. What is Form 29B?

Form 29B means a compulsory audit report for companies in India. It is stated under Section 115JB of the Income Tax Act, 1961. This form helps companies to calculate proper book profits and claim a MAT credit. The MAT is the Minimum Alternate Tax. This report is issued by a Chartered Accountant. A company owner can file it from the official Income Tax Department portal.

Q2. Where can I File Form 29B?

You can file this form through the official Income Tax Department online portal.

Q3. Is filing Form 29B mandatory for all companies?

No, it is not mandatory for all companies. It is mandatory only if the company pays Minimum Alternate Tax (MAT) under Section 115JB. It also applies when the company’s income tax liability is lower than 15% of its book profits.

Q4. Who can prepare and sign this Form?

A practicing Chartered Accountant (CA) can prepare and sign this form. So, the company need to assign the CA through the "My CA" service on the e-filing portal. This will allow them to prepare and file this form.

Q5. What is the due date for filing Form 29B for FY 2024-25 (AY 2025-26)?

The due date for filing this form is 31st October for the Assessment Year. It is the deadline for filing the tax audit reports. So, this form needs to be filed one month before the due date. The due date is for filing the income tax return (ITR) under Section 139(1).

Disclaimer

This article is for informational purposes only and does not constitute legal advice. Online Legal India is a digital platform. If you require legal assistance, we strongly recommend consulting a qualified lawyer or law firm.