How Statutory Compliances Increase with Turnover (India)
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How Statutory Compliances Increase with Turnover (India)
As businesses scale, regulatory obligations don’t rise linearly; they jump in slabs. Understanding these thresholds early helps founders and finance leaders plan systems, costs, and governance before compliance becomes reactive. Turnover-based summary only. Other triggers like capital, borrowings, deposits & net worth also apply. Scaling revenue without scaling compliance is a hidden business risk. Anticipating statutory thresholds early helps avoid last-minute firefighting, penalties, and governance gaps. Below is a simplified and logical explanation of how compliance requirements increase as turnover increases.
Compliance Requirements Based on Company Turnover
This is a turnover-based summary only. Additional compliance triggers may arise due to paid-up capital, borrowings, deposits, net worth & sector-specific laws. A snapshot of how statutory compliances for Indian companies increase with business turnover helps founders and finance leaders anticipate regulatory obligations as they scale.
Applicable to ALL Companies (Regardless of Turnover)
- Income Tax Return (ITR-6) : All companies must file ITR‑6.
- Statutory Audit + ROC Compliance : Includes AOC‑4, MGT‑7/7A, DIR‑3 KYC, AGM, Board Meetings, DPT‑3, MSME. Mandatory across all turnover slabs.
- TDS, TCS, GST Returns : Always applicable if the business activity triggers applicability.
Up to INR 1 Crore Turnover
Basic compliance stage
-
Income Tax Return (ITR)
-
GST returns (if registered)
-
TDS compliances (if applicable)
-
ROC annual filings (AOC-4, MGT-7 / 7A)
Suitable for early-stage / bootstrapped entities
Above Turnover ≥ INR 1 Crore
Tax audit visibility begins
- Tax Audit u/s 44AB (subject to cash transaction limits) : Tax Audit (44AB) : Required if turnover crosses ₹1 crore (subject to 95% digital transactions relaxation).
- CARO Reporting : Applicable from ₹1 crore onward.
-
Increased scrutiny of books & documentation
-
Stronger accounting discipline required
-
Finance function starts becoming critical
Above INR 2 Crore
Audit becomes the norm
-
Mandatory Tax Audit in most cases
-
Detailed reporting in Form 3CD
-
Higher risk of notices if books are weak
Informal accounting no longer sustainable
Above INR 5 Crore
Digital & system-driven compliance
-
Presumptive taxation mostly not available
-
Robust ERP / accounting systems advisable
-
Greater GST reconciliations & vendor compliance tracking
Shift from compliance filing to compliance management
Turnover ≥ INR 10 Crore
Regulatory maturity stage
-
Cost Audit / Secretarial Audit (sector-specific)
-
Enhanced disclosures & Board oversight
-
Lender, investor & regulator reliance on compliance quality
- E-Invoicing : Mandatory once turnover exceeds ₹10 crore (as per threshold in the chart).
- Cash Flow Statement (AS‑3 / Ind AS‑7) : Required for companies with ₹10+ crore turnover.
- MGT‑8 (PCS Certification) : Mandatory for certain classes of companies once turnover exceeds ₹10 crore.
- Compliance failures now have reputational and financial impact
Turnover ≥ INR 50–100 Crore
Cost Audit : Applicable depending on industry (specified sectors such as pharma, engineering, power, etc.).
Turnover ≥ INR 200 Crore
- No major changes noted at ₹200 crore level in your table (Requirements are same as ≥ ₹100 crore).
Turnover ≥ INR 300 Crore
CSR Applicability : Triggered when:
- Turnover ≥ ₹1000 crore, OR
- Net worth ≥ ₹500 crore, OR
- Net profit ≥ ₹5 crore
But according to your table, CSR ✓ appears at ₹300 crore. This may reflect an internal threshold model or a simplified representation.
Turnover ≥ ₹100 Crore
- XBRL Filing (AOC‑4 XBRL) : Mandatory once turnover exceeds ₹100 crore OR if company meets other XBRL criteria.
- ISIN (CDSL/NSDL) : Required if the company is an unlisted public company.
- Audit Committee : Required from this threshold.
- NRC Committee : Remuneration-related committee mandatory beyond ₹100 crore turnover.
- Independent Director Appointment : Required once turnover exceeds ₹100 crore.
- Secretarial Audit (Sec 204) : Required if the company’s turnover exceeds ₹250 crore OR borrowings ≥ ₹100 crore (as per your chart: ✓ for borrowing ≤ ₹100 crore).
Simplified Turnover –Compliance Ladder
| Turnover Slab | Key New Compliances |
|---|---|
| Up to INR 1 Cr | Basic ROC + ITR |
| INR 1 Cr+ | Tax Audit, CARO |
| INR 10 Cr+ | E‑Invoicing, Cash Flow, MGT‑8 |
| INR 50 Cr+ | Cost Audit (sector-specific) |
| INR 100 Cr+ | XBRL, Audit & NRC Committee, Independent Director, ISIN (unlisted public) |
| INR 250–INR 300 Cr+ | Secretarial Audit, CSR (as per table) |