Question 1

What tax clearances are needed before a company can be struck off?

Accepted Answer

Before filing STK-2 (fast-track strike-off under Section 248 of the Companies Act 2013): all ITRs must be filed up to the cessation date, GST registration must be cancelled (Form REG-16), all TDS returns filed and TDS remitted, and any outstanding demands from Income Tax, GST, or TDS departments cleared. MCA cross-checks PAN-linked demands before approving STK-2.

Question 2

How is GST registration cancelled on entity closure?

Accepted Answer

GST REG-16 is filed on the GST portal selecting "Cessation of Business". A final GSTR-10 (final return) must be filed within 3 months of the effective cancellation date, reversing ITC on closing stock under Rule 44. Late filing of GSTR-10 attracts ₹200/day (₹100 CGST + ₹100 SGST), capped at ₹10,000.

Question 3

What TDS obligations remain on closure?

Accepted Answer

All TDS deducted up to the closure date must be deposited via Challan 281 and reported in quarterly TDS returns (Form 26Q/24Q/27Q). Form 16 must be issued to employees for the partial year. TAN surrender is possible only after all TDS returns are filed and demands from TDS CPC (Vaishali) are cleared.

Question 4

How is an LLP dissolved?

Accepted Answer

LLP closure uses Form 24 under Rule 37 of LLP Rules 2009 — the LLP must declare it ceased business for at least one year or never commenced, attach ITR-5 filings and a CA-certified statement of accounts not older than 30 days. For LLPs with assets, voluntary winding up under Sections 63–65 of the LLP Act 2008 applies.

Question 5

Is there exit tax on winding up?

Accepted Answer

Yes — distributions to shareholders above paid-up capital and general reserves are deemed dividend under Section 2(22)(c) of the Income Tax Act, taxable in the shareholders' hands. Capital gains arise on any asset transferred or sold during liquidation — the company is the assessee. Accumulated losses are extinguished on dissolution and cannot transfer to shareholders.

Final Tax Clearance on Entity Closure

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