In India, Limited Liability Partnerships (LLPs) are among the most liked business structures due to the flexibility, limited liability, and convenience to operate. Nevertheless, when it comes to Income Tax Return Filing for LLP, most partners do not know how to handle this situation, especially when the LLP is not doing any business activity for the financial year but has interest income or the capital contribution is beyond ₹25 lakhs.
This comprehensive blog will guide you with clarity:
• What is the due date for filing an income tax return in this case?
• Is tax audit applicable for the LLP if it has not done business during the year.
• What are the compliance requirements that every LLP must follow under the Income Tax Act?
Understanding Income Tax Return Filing for LLPs
Before we discuss the due date and the applicability of tax audit, let’s quickly grasp some basic understandings of Filing Income Tax Return for a Limited Liability Partnership (LLP). An LLP is considered a separate legal entity under the Income Tax Act, 1961. It is a trust for filing income tax return for every financial year regardless of whether business or not carried out. Even if the LLP has not entered into any business transactions, and earned an income which is only ‘interest income’ (from bank deposits for example), LLP has to file its return of income.
This applies to:
• Active LLPs carrying out business.
• Dormant LLPs, where there is no business.
• LLPs that have been formed but are not started operations yet.
So even in this case where total capital contributions, of the LLP exceed ₹25 lakh but have not any business other than interest income, Filing Income Tax Return for LLP in India is required.
When is an LLP Required to File Its Income Tax Return?
The deadline for submitting income tax returns for LLPs is contingent upon whether the LLP is mandated to have accounts audited under Section 44AB of the Income Tax Act.
Let's consider two situations:
1.LLPs Not Needing Audit
If an LLP's turnover during the financial year is below ₹40 lakhs and its contribution is below ₹25 lakhs; it doesn't need to approve the accounts under the LLP Act or Income Tax Act. If this holds true for you, the deadline to submit the income tax return is 31st July of the assessment year (e.g., 31st July 2025 for FY 2024–25).
2. LLPs Needing Audit
However, when
• The turnover exceeds ₹40 lakhs, or
• The contribution exceeds ₹25 lakhs,
The LLP must have its accounts approved under the LLP Act, 2008, regardless of whether or not the LLP conducted business activities or not. In your case, because an LLP's contributions exceed ₹25 lakhs, the LLP is required to conduct the tax audit under the LLP Act, 2008 even if a business was not conducted during the year.
Therefore, in such a case, the deadline to submit the Income Tax Return for the LLP would be 30th September in the assessment year.
Is a Tax Audit Required for an LLP with Only Interest Income?
Now, let’s clarify the most debated question whether there is a requirement of tax audit if there is no business activity and the LLP has interest income and contribution in excess of ₹25 lakhs.
1.Tax Audit Under Section 44AB of the Income Tax Act
Tax audit under Section 44AB of the Income Tax Act, is warranted where:
• The total turnover or gross receipts exceed ₹1 crore; or
• The LLP has opted for presumptive taxation under Section 44ADA/44AD and the income exceeds the prescribed limits.
Assuming your LLP has no business income and the only income is interest income; this interest income will be treated as "Income from Other Sources."
Thus ultimately, in a strict sense based on the Income Tax Act, the requirement for a tax audit under Section 44AB would not arise as there is no business turnover.
2. Audit Under the LLP Act, 2008
Nevertheless, according to the Limited Liability Partnership Act, 2008, Rule 24(8) of the LLP Rules states that all LLP's must have their accounts audited if they either:
• Exceed a turnover of ₹40 lakhs, or
• Exceed a capital contribution of ₹25 lakhs
Hence in your particular case, as your contribution is greater than ₹25 lakhs, an audit under the Act is necessary, even if there has been no business activity.
In conclusion:
• Tax audit under the Income Tax Act - not required, as there is no business Income
• Audit under the LLP Act- required, as contribution > ₹25 lakhs.
Due Date for Income Tax Return Filing for LLP
Here’s how the due dates for Income Tax Return Filing for LLP in India are determined:
Category
Audit Requirement
Due Date of ITR Filing
Example (FY 2024–25)
LLPs not requiring audit
No
31st July 2025
Non-audited LLP
LLPs requiring audit
Yes
30th September 2025
LLP with contribution > ₹25 lakhs or turnover > ₹40 lakhs
LLPs with international transactions (transfer pricing)
Yes (TP Audit)
30th November 2025
LLP with cross-border transactions
In your specific case (LLP with contribution above ₹25 lakhs but no business activity): Audit under LLP Act – Required Tax audit under Income Tax Act – Not required Due Date for Filing ITR – 30th September 2025
How to File an Income Tax Return for an LLP
Even if your LLP has not done any business during the financial year, you still need to file the return accurately. Here’s a step-by-step guide:
Step 1: Gather Basic Documents
Step 2: Determine the Correct ITR Form
LLPs are required to file ITR-5 for Income Tax Return Filing for LLP in India. This form is used by:
Step 3: Prepare the Financial Statements
Even if there’s no business, you must prepare:
Step 4: Get the Accounts Audited (if applicable)
Since your LLP’s contribution exceeds ₹25 lakhs, ensure that the accounts are audited under the LLP Act before filing the return.
Step 5: File the Return Online
File the ITR-5 form through the Income Tax e-Filing portal (https://www.incometax.gov.in) using your Digital Signature Certificate (DSC) of the designated partner.
What Happens If You Fail to File the Income Tax Return for LLP on Time?
Filing after the due date can result in the following consequences:
• Late Filing Fees (Section 234F):
If LLP’s income is less than ₹5 lakh penalty will be limited to ₹1,000.
• Interest on Late Payment (Section 234A): Interest will be imposed on late unpaid tax.
• In eligibility to carry forward losses: Business or capital losses will not be carried forward in case of late filing of income tax return for LLP. • Prosecution in Specific Cases: There may be penalties and prosecution for willful defaults.
Therefore, it’s always a good idea to file your LLP’s income tax return on or before the due date.
Why Income Tax Return Filing for LLP Is Important — Even with No Business
Filing your ITR is important even if your LLP has not been doing any business and is dormant:
1. Legal Requirement – To remain within the provisions of the LLP Act and avoid penalties.
2. Financial Record – Develop a history and record showing the existence of your LLP and compliance.
3. Banking and Loans – Banks and other financial institutions assess credit or debt with a review of past ITRs.
4. Future Business – If you do file ITRs as a regular activity it will be easier if you want to commence business later.
5. Avoid Prosecution – Non-filing may cause you to receive a notice under Section 276CC of the Income Tax Act.
Therefore, whether your LLP is active or dormant, the Income Tax Return Filing for LLP in India should be considered a compulsory annual exercise.
Compliance Checklist for LLPs with No Business Activity
If your LLP is no longer in business or only has interest income, these are the things you need to do every year for compliance:
File Form 11 (Annual Return) with the ROC before the 30th May of every year.
File Form 8 (Statement of Accounts & Solvency) before 30th October of every year.
File the Income Tax Return (ITR-5) of the LLP before 31st July (if no audit is applicable).
Maintain and keep bank statements, PAN, capital contribution records in order.
This will ensure your LLP is compliant and active with the MCA and the Income Tax portal.
What If the LLP Has Partners’ Contribution Above ₹25 Lakhs?
The capital contribution amount in your LLP (₹25 lakhs) does will not impact or trigger the need for an income tax audit requirement under Section 44AB. The tax audit requirement arises from:
• Total turnover or total income, and
• Business activity in the year
Again, the contribution amount is relevant for ROC compliance under LLP Act, but it is not relevant for tax audit applicability.
Therefore, even if your LLP has a high contribution amount, it does not become mandatory to conduct the tax audit unless the turnover is greater than ₹1 crore or you have declared lower profits than the deemed income under Section 44AD, if applicable.
Compliance Summary for LLP with No Business and Interest Income
Compliance Requirement
Applicability
Description
Income Tax Return Filing (ITR-5)
Mandatory
Even if LLP is inactive or has only interest income
Tax Audit (u/s 44AB)
❌ Not required
Since there’s no turnover or business
Due Date for ITR Filing (Non-Audited LLP)
July 31
For FY 2024–25 → 31st July 2025
Due Date for ITR Filing (Audited LLP)
October 31
Not applicable in this case
ROC Annual Filing (Form 8 & 11)
Must be filed even if no business
Conclusion
In the event your LLP did not conduct any business activities, but has interest income filing the Income Tax Return for LLP is necessary. The deadline to file for Income Tax Return for LLP depends on whether your LLP is required to have a tax audit. In your situation where the LLP contribution exceeds ₹25 lakhs and business activities did not occur, the ITR filing would be due on July 31 because no audit is required. When you file you Income Tax Return for LLP in India on time you are compliant, avoid penalties, and are in good standing with the law. If you want to be sure that your ITR is compliant and submitted on time, you should engage a professional Income Tax Return Filing for LLP Service who will do end-to-end and manage your ITR process for you. You take a small step towards compliance today so that you can worry less and know that you have effectively shielded your LLP from future legal and financial implications.
Frequently Asked Questions (FAQs)
1. Is an LLP required to file an income tax return even if it has no business activity?
Yes. Every LLP registered in India must file an income tax return annually, irrespective of whether it has conducted any business during the year.
2. What is the due date for Income Tax Return Filing for LLP in India?
The due date is 31st July if no audit is required and 30th September if the LLP’s accounts are required to be audited.
3. My LLP has a contribution of ₹30 lakhs but no turnover. Is audit mandatory?
Yes. Under the LLP Act, an audit is mandatory if the contribution exceeds ₹25 lakhs, even if there is no turnover.
4. Does interest income make the LLP liable for a tax audit?
Not under the Income Tax Act. Since interest income is classified as “Income from Other Sources,” it doesn’t trigger a tax audit. However, an LLP Act audit is still required if the contribution exceeds ₹25 lakhs.
5. What form should an LLP use for filing its return?
LLPs should file ITR-5 through the Income Tax Department’s e-filing portal.
6. What happens if an LLP fails to file its return on time?
Late filing can attract penalties under Section 234F, interest on tax dues, and loss of benefits like carry-forward of losses.
7. Can I file an LLP’s ITR without a DSC?
No. Filing of ITR for LLPs must be done using a Digital Signature Certificate of a designated partner.
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