Form 29B of the Income Tax Act: Applicability, Filing Process, Due Date, and Penalty
- Dipali Waghmode
- Mar 11
- 8 min read
To prevent legal repercussions, you must be aware of India's current tax rules if you are operating a business in the country. Businesses that neglect to file their returns risk paying steep fines. Form 29B is one of the most important IT filings for corporate entities in India. The July 2020 ITAT (Income Tax Appellate Tribunal) rule states that business losses and expenses are distinct from one another. Furthermore, adding your sustained loss to your taxable income is prohibited by Section 115JB of the Income Tax Act of 1961. Any business entity must file Form 29B in order to record and disclose its profit. Learn what Form 29B is, how to file it, and more by reading this article.
Table of Content
What is Form 29B of the Income Tax Act?
According to Section 115JB of the Income Tax Act, Form 29B is necessary in order to evaluate the book earnings of your business. You can use this form to determine the precise book profit in order to submit a claim for the Minimum Alternate Tax (MAT) credit. This form must be provided by a chartered accountant if your business is subject to Section 115JB. You must calculate your MAT and tax liability as a business owner and pay both in accordance with the tax laws. Furthermore, if your usual tax amount is less than the MAT, you must pay the MAT amount without fail. This is because, according to the Income Tax Law, a business must pay the larger of the two tax amounts. However, your company's book profit as stated in Form 29B determines the Form 29B MAT amount.
Understanding Minimum Alternate Tax (MAT)
The Indian tax system's Minimum Alternate Tax (MAT) provision requires businesses to pay a minimum amount of tax, even if they qualify for certain tax breaks or incentives that drastically lower their taxable revenue. It pushes businesses to continue being open and equitable when disclosing their earnings and tax obligations. Because these "Zero Tax Companies" have large book profits but lower taxable income because of various tax benefits and incentives under the Income Tax Act, MAT seeks to ensure that they pay higher taxes.
Applicability of Form 29B
Every business whose revenue is less than 15% of its book profit must have a report on Form 29B from a chartered accountant. One month prior to the return filing deadline under Section 139(1), this report must be received and submitted, or it may be included with the income return provided in response to a notice under Section 142(1)(i). To comprehend the applicability of Form 29B, business owners should review the following points:
You must obtain a certificate for Form 29B from an accredited chartered accountant (CA) as the owner of the business. According to the Income Tax Act of 1961, the anticipated book earnings must be confirmed.
The e-filing interface should be accessible to both the taxpayer and the CA using their unique login credentials. Additionally, the designated CA must possess a current Digital Signature Certificate (DSC) that is registered on the IT e-filing portal.
You should hire a chartered accountant from My CA service as the proprietor of your business. In accordance with the Income Tax Act, the designated CA will submit an audit report to you on Form 29B. Your request for an audit report may not always be granted by the designated CA, but if it is, he must provide Form 29B.
Businesses must adhere to the government-approved format when completing Form 29B in order to prevent errors that could result in fines.
When filing Form 29B, be sure to include all necessary information, like your name, address, company PAN number, assessment year, etc. When submitting this form, you must also include your company's book profit figure.
Steps to File Form 29B
Step 1: To log in, go to the official Income Tax website and enter your User ID and password.
Step 2: Choose E-file > Forms for Income Tax > Use the Dashboard to file income tax forms.
Step 3: From the form tiles, select Form 29B. In accordance with Section 115JB of the Income Tax Act, this form is used to validate your company's book earnings.
Step 4: If you haven't previously, use the My CA service to assign a CA. A current DSC that is registered on the e-filing site is required of the CA.
Step 5: Put in the Assessment Year and provide the required paperwork. To send the form to the CA, click Continue.
Step 6: A success notification containing a Transaction ID will be sent to you. For future reference, you should write down the Transaction ID.
Due Date for Filing Form 29B
Every business is required by Section 115JB of the Income Tax Act of 1961 to submit Form 29B with its book earnings for a specific assessment year. However, a certified public accountant must certify your report. At your leisure, you can submit this form offline or online. The notice you receive under Section 142(1) determines the due date for Form 29B. Additionally, in accordance with Section 139(1), you may file the form with income returns up to one month prior to the return filing deadline.
Penalty for Not Filing Form 29B
Section 271BA states that you will be subject to a significant penalty if you do not get the audit report and file Form 29B before the deadline. In certain situations, the penalty for filing Form 29B after the deadline can reach Rs 1,00,000. However, Section 273B stipulates that you are exempt from penalties under Section 271 BA if you can provide a valid explanation for why you were unable to submit the form by the deadline.
Form 29B PDF
Form 29B is available on the official Income Tax India website in PDF format. This form is divided into three sections, Part A, Part B, and Part C, along with an audit report. While Part A is applicable to all Indian commercial organisations, Parts B and C are only applicable under certain circumstances. Form 29B (Income Tax Act) breakdown is as follows:
Part A: This section gives broad information regarding a company's book profits.
Part B: Provides information on the amounts that need to be raised or lowered in compliance with Section 115JB, sub-section (2A).
Part C: Provides details on the amounts that must be changed in accordance with the same section's sub-section (2C).
Conclusion
Businesses must determine their tax liability under MAT and in accordance with regular tax regulations, and they must pay the higher amount. The corporation is required to pay the MAT liability, which is determined by their book earnings, if the MAT amount is much higher. A crucial component of maintaining tax compliance is Form 29B, which details the business's book earnings. A crucial report that aids businesses in claiming MAT credit is Form 29B. Therefore, in accordance with the IT Act, submitting an 80 DDB is required. The businesses benefit from it since it enables them to get the MAT credit they are entitled to.
FAQ
Q1. Is it compulsory to file Form 29B?
Every company whose income is less than 15% of its book profit (as of AY 2020–21) must obtain a report from a chartered accountant in Form 29B. This report must be obtained and submitted one month prior to the return filing deadline under Section 139(1) or with the income return provided in response to a notice under Section 142(1)(i).
Q2. Is Form 29B mandatory in case of loss?
According to section 115JB of the Income Tax Act of 1961, enterprises that are subject to the Minimum Alternate Tax (MAT), including those that are experiencing losses, are required to submit Form 29B. A business must have its accounts audited and file Form 29B even if it is losing money if it is required to pay taxes under section 115JB.
Q3. What is the convergence date in form 29B?
The date that the book profits calculated in accordance with section 115JB of the Income Tax Act and the financial statements prepared in accordance with the Companies Act converge is referred to as the "convergence date" in Form 29B.
Q4. Is there any penalty for not filing Form 29B?
Failure to file Form 29B and the audit report by the deadline, as mandated by Section 92E, results in a penalty under Section 271BA. Depending on the circumstances, the fine could reach Rs 1,00,000. If you have a good basis for delaying the submission of Form 29B, you can avoid the penalty under Section 273B.
Q5. What is the due date for filing Form 29B?
The notice a taxpayer receives under Section 142(1) determines the deadline for filing Form 29B of the Income Tax Act. Form 29B may be filed with the ITR up to one month prior to the return furnishing deadline specified under Section 139(1).
Q6. Can Form 29B be filed after the due date?
Form 29B can be filed after the deadline, however, it is best to file it as soon as possible to prevent late filing penalties and repercussions. However, in accordance with the Income Tax Act's restrictions, filing beyond the deadline may result in fines.
Q7. Is UDIN required For Form 29B?
The Auditor's resignation does not require UDIN. NOC from the prior auditor is also not necessary. 9. For the MAT (Minimum Alternate Tax) Audit Report, a distinct UDIN must be created in Form 29B.
Q8. Can Form 29B be amended once submitted?
No, once Form 29B is submitted, it cannot be changed.
Q9. How do I know that my CA has accepted my request to file Form 29B?
In your Work list (For your Actions), you will see the following status if the request has been approved by your designated CA:
Uploaded by CA-Pending Acceptance, meaning your request has not yet been approved by the CA; or
Uploaded-Pending Assessee Acceptance: this means that Form 29B has already been uploaded and turned in by the CA.
Q10. How do I know that my CA has rejected my request to file Form 29B?
Your email address and mobile number linked to the e-filing site will be notified if your designated CA denies your request to complete form 29B.
Q11. How do I know that my CA has prepared and submitted Form 29B?
A confirmation will be sent to the email address and mobile number you have on file with the e-filing portal. The status can also be shown in your Worklist (for your actions). You will see Uploaded-Pending Acceptance by Assessee if the CA has uploaded Form 29B.
Q12. Can a company submit Form 29B by itself?
Form 29B can only be filed on behalf of the company by the CA that the company has designated; the corporation itself is not permitted to submit it.
Q13. What is the tax audit clause 29B?
The particular specifications listed in Rule 29B pertaining to the creation and filing of tax audit reports are referred to as tax audit clause 29B. It guarantees that the audit report accurately depicts the taxpayer's financial situation and is done in compliance with established rules.
Q14. What is Form 29B, and who needs to file it?
It is a tax audit report required for companies whose book profits exceed ₹1 crore, ensuring compliance with Minimum Alternate Tax (MAT).
Q15. Is Form 29B mandatory for startups under the tax holiday scheme?
No, startups claiming tax holidays under Section 80-IAC are exempt from MAT and Form 29B filing.
Q16. What are the key contents of Form 29B?
It includes details of book profits, allowable adjustments, tax calculations, and certification by a Chartered Accountant.
Q17. Can a company file its ITR without submitting Form 29B?
No, if applicable, Form 29B must be filed before the income tax return to avoid processing delays.
Q18. How does Form 29B impact foreign companies operating in India?
Foreign companies with taxable presence (PE) in India must file Form 29B if they fall under MAT provisions.
Q19. What is the deadline for filing Form 29B?
It must be filed before the income tax return due date, typically September 30 for corporates.
Q20. What penalties apply for late filing or non-filing of Form 29B?
Non-filing can lead to interest under Section 234B/234C and adjustments to tax liability by the department.
Q21. Does an LLP need to file Form 29B?
No, MAT applies only to companies; LLPs are covered under AMT (Alternate Minimum Tax) provisions.
Q22. Can Form 29B be revised after submission?
Yes, revisions are possible before the return filing deadline if there are errors or miscalculations.
Q23. Is digital filing of Form 29B allowed?
Yes, it must be filed online through the e-filing portal along with the company’s digital signature.
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