India is home to over 1.5 lakh DPIIT-recognised start-ups. But a staggering number face ROC notices, income tax demands, and GST scrutiny — not because they built bad products, but because they missed routine compliance deadlines. This is the complete, practical compliance guide every Indian start-up founder needs to bookmark.
The most critical compliance window for a start-up is immediately after incorporation. Founders typically focus on product, fundraising, and hiring — and miss several statutory deadlines that attract disproportionately large penalties.
| Obligation | Deadline from Incorporation | Penalty for Default |
|---|---|---|
| Open a current bank account | Within 30 days | Registrar may question compliance |
| Appoint First Auditor (Board Resolution) | Within 30 days | Company cannot function without auditor; ₹50,000 fine |
| File INC-20A (Business Commencement Declaration) | Within 180 days | ₹50,000 company + ₹1,000/director/day |
| First Board Meeting | Within 30 days | Fine per director; minutes must be recorded |
| GST Registration (if applicable) | Within 30 days of crossing threshold or first interstate sale | ₹10,000 or 10% of tax, whichever is higher |
| PF/ESIC Registration (if 20+ employees) | Within 30 days of reaching 20 employees | Damages 5%–25% + prosecution |
INC-20A — the Business Commencement Declaration — is missed by a shocking number of start-ups. Without filing INC-20A, the Registrar can initiate company strike-off proceedings. It must be filed within 180 days of incorporation, and requires proof of paid-up capital in the company's bank account.
A Private Limited Company must hold a minimum of 4 Board Meetings per year, with no gap exceeding 120 days between consecutive meetings. An Annual General Meeting (AGM) must be held within 6 months from the close of the financial year (i.e., by September 30 for March year-end companies).
| Form | What it Covers | Due Date | Late Penalty |
|---|---|---|---|
| AOC-4 | Annual Financial Statements + Auditor Report | Within 30 days of AGM | ₹100/day (no cap) |
| MGT-7 / MGT-7A | Annual Return | Within 60 days of AGM | ₹100/day (no cap) |
| ADT-1 | Auditor Appointment/Re-appointment | Within 15 days of AGM | ₹300 + ₹300/day |
| DIR-12 | Director Appointment/Resignation/Change | Within 30 days of event | ₹300 + ₹300/day |
| MSME Form I | Outstanding dues to MSME vendors beyond 45 days | April 30 & October 31 | ₹25,000–₹3 lakh |
All companies (including start-ups) must file ITR-6. If turnover exceeds ₹1 crore (₹10 crore for digital transactions), a tax audit under Section 44AB is mandatory. The Tax Audit Report (Form 3CA-3CD) must be filed by September 30. ITR for companies is due by October 31.
DPIIT-recognised start-ups can claim a 100% income tax deduction for 3 consecutive years out of the first 10 years of incorporation, subject to total income not exceeding ₹1 crore in any year (this limit was raised in recent budgets — verify current limits). The start-up must be incorporated on or before April 1, 2030 (extended in Finance Act 2025). Application is made to the Inter-Ministerial Board (IMB).
Start-ups are immediately subject to TDS obligations the moment they make payments above thresholds — salaries (192), contractor payments (194C), professional fees (194J), rent (194I), and from April 2025, partner payments (194T). Many early-stage start-ups overlook TDS compliance, resulting in disallowance of expenses and penalties during their first tax assessment.
DPIIT-recognised start-ups get a unique benefit: TDS on ESOP perquisites can be deferred to the earlier of 5 years from exercise, date of sale of shares, or date of leaving. This helps employees who can't immediately sell shares to fund their tax liability.
GST registration is mandatory if: annual turnover exceeds ₹40 lakh (goods) or ₹20 lakh (services); you make inter-state supplies regardless of turnover; you are an e-commerce operator or aggregate marketplace. Once registered, the compliance calendar includes GSTR-1 (monthly/quarterly), GSTR-3B (monthly/quarterly), and GSTR-9 (annual return, if turnover above ₹2 crore).
A critical but often overlooked obligation: if you raise invoices to foreign clients (exports), you must either collect IGST and claim a refund, or export under a Letter of Undertaking (LUT). LUTs must be filed annually on the GST portal before the start of each financial year (by March 31) to export services without paying IGST.
| Law | Applicability Threshold | Key Obligation |
|---|---|---|
| Provident Fund (PF) | 20+ employees | 12% employer + 12% employee contribution; monthly ECR filing |
| ESIC | 10+ employees (salary ≤ ₹21,000) | 3.25% employer + 0.75% employee; monthly payment |
| Gratuity | 10+ employees | Payable after 5 years of service; 15 days salary per year |
| Professional Tax | Varies by state | Monthly deduction from salary; state-specific rates |
| Shops & Establishments Act | All offices | Register within 30 days of starting operations in each state |
DPIIT (Department for Promotion of Industry and Internal Trade) recognition is free and unlocks substantial benefits. Key benefits include the Section 80-IAC tax holiday eligibility, exemption from angel tax under Section 56(2)(viib) (now abolished for all, but DPIIT recognition still has other benefits), ESOP TDS deferral for employees, access to government procurement without prior experience requirements, fast-track patent examination with 80% rebate on patent fees, and self-certification under labour and environmental laws.
To apply: Visit startupindia.gov.in → Apply for DPIIT Recognition → Submit incorporation certificate, description of innovative nature of business, and any IP/product documentation. Approval typically comes within 2 weeks.
Start-ups receiving foreign investment (from angel investors, VCs, or foreign parent companies) must comply with FEMA (Foreign Exchange Management Act). Key obligations include: reporting FDI inflows in Form FC-GPR within 30 days of allotment of shares to the RBI through the Firms Portal; filing Form FC-TRS for transfer of shares between residents and non-residents; annual FEMA reporting via Foreign Liabilities and Assets (FLA) return by July 15 each year. Non-compliance with FEMA can result in penalties up to 3x the amount involved.
| Default | Penalty |
|---|---|
| Late filing of AOC-4 or MGT-7 | ₹100/day (no cap) |
| Not holding AGM | ₹1 lakh + ₹5,000/day |
| TDS not deducted | 100% of TDS amount (Sec 271C) + 1% interest/month |
| GST registration not obtained | ₹10,000 or 10% of tax |
| FEMA violation (FDI not reported) | Up to 3x the violation amount |
| PF default | 5%–25% damages + prosecution |
| INC-20A not filed | ₹50,000 company + ₹1,000/director/day |
| Month | Key Deadlines |
|---|---|
| April | File LUT for GST exports; start new TDS, TCS rates; PF/ESIC for March |
| May | Q4 TDS return (26Q/24Q); auditor appointment (if AGM in March) |
| June | Form 16 to employees; FLA return (July 15); advance tax (15%) |
| July | ITR for non-audit companies; Q1 TDS return; FLA return |
| August | MSME Form I (April–September); AGM (if not yet held) |
| September | Tax audit report (Form 3CA-3CD); advance tax (45%); GSTR-9 planning |
| October | ITR for companies (tax audit cases); Q2 TDS return; MSME Form I |
| November | AOC-4 and MGT-7 (for September AGM companies) |
| December | Advance tax (75%); GSTR-9 / GSTR-9C filing |
| January | Q3 TDS return; review compliance gaps for Q3 |
| February | Plan tax regime choice for next year; review 80-IAC eligibility |
| March | Advance tax (100%); LUT renewal; year-end tax planning |
Our senior CA team is available for personalised consultations. We handle both individual and business tax matters with precision. Reach out for a confidential discussion — we typically respond within one business day.
Our Start-up Advisory practice at Shahi & Co. assists businesses across New Delhi and Pan-India. Reach out for a confidential discussion.