Non-compliance in India triggers per-day statutory fees, separate personal penalties on directors, and, in repeat cases, director disqualification or company strike-off. The exposure stacks: the company pays, each officer in default pays, and the entity’s banking, funding, and continuity all take the hit. Most fines run on a per-day clock, so a missed filing costs more every day it stays open.
India’s penalty regime spans four laws: the Companies Act 2013 (filings with the Registrar of Companies, or ROC), administered by the Ministry of Corporate Affairs (MCA), whose additional-fee schedule charges ₹100 per day of delay; tax statutes covering Goods and Services Tax (GST) and Tax Deducted at Source (TDS); employment laws such as the Employees’ Provident Fund (EPF) Act; and the Foreign Exchange Management Act (FEMA) for foreign-owned entities. The table below summarizes the penalties that matter most.
| Penalty category | Trigger | Amount | Law / section | Source |
|---|---|---|---|---|
| ROC form late fee | Any MCA form filed after its due date | ₹100/day per form, no cap | Companies (Registration Offices and Fees) Rules 2014 | MCA |
| Annual return default | MGT-7 / MGT-7A not filed | ₹10,000 + ₹100/day; cap ₹2,00,000 company / ₹50,000 officer | Section 92, Companies Act 2013 | MCA / IndiaCode |
| Financial statement default | AOC-4 not filed | ₹10,000 + ₹100/day; cap ₹2,00,000 company / ₹50,000 officer | Section 137, Companies Act 2013 | IndiaCode |
| DIR-3 KYC lapse | Director KYC not filed | Director Identification Number (DIN) deactivated; ₹5,000 reactivation fee | Rule 12A, Directors Rules 2014 | MCA |
| GSTR-3B late fee | GST return filed late | ₹50/day (₹20 nil return) | Section 47, CGST Act 2017 | CBIC |
| GST interest | Tax paid late | 18% per annum | Section 50, CGST Act 2017 | CBIC |
| TDS return late fee | TDS/TCS statement filed late | ₹200/day, capped at the tax amount | Section 234E, Income Tax Act 1961 | Income Tax Department |
| FEMA contravention | FDI / FEMA breach | Up to 3x the sum involved (₹2,00,000 if unquantifiable) | FEMA 1999 | RBI |
| EPF late deposit | Provident Fund contribution paid late | Damages 5–25% p.a. + 12% interest | Sections 14B & 7Q, EPF Act 1952 | EPFO |
What Are the Penalties for Non-Compliance in India?
Penalties span four layers. Company law penalties come from the Companies Act 2013, administered by the Ministry of Corporate Affairs (MCA) through the Registrar of Companies (ROC). Tax penalties cover GST, TDS, and income tax. Employment penalties cover EPF and state labour laws. Foreign exchange penalties come from FEMA. Each layer fines the company and its officers separately.
Non-compliance is a business-continuity issue, not a paperwork issue. Unresolved filings freeze further submissions, surface in investor and lender diligence, and expose directors personally. A single missed deadline rarely stays isolated. Per-day fees compound while the company and each officer in default accrue separate penalties on the same default.
What Is the Penalty for Late Statutory Filing in India?
Most ROC forms attract an additional fee of ₹100 per day per form, with no upper cap, under the Companies (Registration Offices and Fees) Rules 2014 (MCA). Sections 92 and 137 of the Companies Act 2013 add fixed penalties of ₹10,000 plus ₹100 per day of continuing default, capped at ₹2,00,000 for the company and ₹50,000 per officer in default.
The per-day fee runs fast. A form filed six months (about 180 days) late carries roughly ₹18,000 in additional fees alone, before any Section 92 or 137 penalty is added. The MCA fee schedule confirms the uncapped ₹100-per-day rate for annual filings such as MGT-7 and AOC-4, effective 1 July 2018.
Which Annual Filings Must an Indian Company or Subsidiary Make?
Every Indian private limited company, including a foreign-owned subsidiary, files AOC-4, MGT-7 or MGT-7A, DIR-3 KYC, ADT-1, DPT-3, and, where applicable, MSME-1. The calendar keys off the Annual General Meeting (AGM), which must be held within six months of the financial year end (by 30 September for a 31 March year end). A first AGM is due within nine months of the first year end.
| Form | Purpose | Deadline | Source |
|---|---|---|---|
| AOC-4 | Financial statements | 30 days from AGM | Section 137, Companies Act 2013 |
| MGT-7 / MGT-7A | Annual return (7A for small companies and One Person Companies, or OPCs) | 60 days from AGM | Section 92, Companies Act 2013 |
| DIR-3 KYC | Director KYC | Once every 3 years, by 30 June (from 31 March 2026) | Rule 12A, Directors Rules 2014 (PIB) |
| ADT-1 | Auditor appointment | 15 days from AGM | Companies Act 2013 |
| DPT-3 | Return of deposits | 30 June annually | MCA |
| MSME-1 | Half-yearly dues to Micro, Small and Medium Enterprises (MSMEs) | April & October | MCA |
MCA moved DIR-3 KYC from an annual to a triennial cycle, due by 30 June once every three years, effective 31 March 2026 under the Companies (Appointment and Qualification of Directors) Amendment Rules 2025 (PIB).
What Happens if a Company Misses ROC Filings Repeatedly?
Penalties compound daily, and the consequences escalate. Under Section 164(2) of the Companies Act 2013, directors of a company that fails to file financial statements or annual returns for three consecutive financial years are disqualified. The ROC can also strike the company off the register under Section 248, which legally dissolves it once published in the Official Gazette.
The blocks are tangible well before dissolution. The MCA21 portal freezes further filings, and banks and investors flag the entity during diligence. In its 2017 shell-company drive, the MCA disqualified around 3.09 lakh directors and struck off about 2.24 lakh companies (PIB, 5 November 2017).
When Are Directors Personally Liable for Non-Compliance in India?
The Companies Act 2013 penalizes “officers in default” separately from the company, so each responsible director carries their own monetary penalty. Under Sections 92 and 137, that exposure runs up to ₹50,000 per officer for annual-return and financial-statement defaults. For serious offences, specific sections add imprisonment. Company liability and personal liability stack; they are not alternatives.
Paying the company penalty does not clear the director’s. Directors who track their obligations limit this exposure. Commenda’s guide to director liability and compliance risks in India details where personal penalties attach and how they escalate.
How Does Director Disqualification Work in India?
Under Section 164(2) of the Companies Act 2013, a director of a company that fails to file financial statements or annual returns for three consecutive financial years cannot be reappointed in that company or appointed as a director in any other company for five years. The same five-year bar applies where a company defaults on deposits, debentures, or a declared dividend for one year or more.
A separate trigger is DIR-3 KYC. A director’s Director Identification Number (DIN) is deactivated when KYC lapses, and reactivation requires a flat ₹5,000 fee under Rule 12A (MCA). A director newly appointed to an already-defaulting company gets a six-month grace period before disqualification applies (proviso to Section 164(2), effective 7 May 2018). The five-year term then runs its course.
What Are the GST, TDS, and Income Tax Penalties for Non-Compliance?
GST late fees run ₹50 per day per return (₹20 for nil returns) plus 18% annual interest on unpaid tax under the Central Goods and Services Tax (CGST) Act 2017. TDS defaults cost 1.5% monthly interest plus ₹200 per day under Section 234E of the Income Tax Act 1961. Late income tax returns attract a fee up to ₹5,000 under Section 234F.
| Default | Fee / interest | Law | Source |
|---|---|---|---|
| GSTR-1 / GSTR-3B filed late | ₹50/day (₹20 nil return) | Section 47, CGST Act 2017 | CBIC |
| GST paid late | 18% per annum interest | Section 50, CGST Act 2017 | CBIC |
| TDS deposited late | 1.5% per month interest | Section 201, Income Tax Act 1961 | Income Tax Department |
| TDS / TCS (Tax Collected at Source) return late | ₹200/day, capped at the tax amount | Section 234E, Income Tax Act 1961 | Income Tax Department |
| Income tax return filed late | Up to ₹5,000 | Section 234F, Income Tax Act 1961 | Income Tax Department |
The Central Board of Indirect Taxes and Customs (CBIC) publishes the current GST rates and caps. For the monthly return itself, Commenda’s GSTR-1 filing guide for businesses in India walks through the deadlines that trigger these fees.
What Are the Penalties for Payroll and Employment Non-Compliance?
Late Employees’ Provident Fund (EPF) deposits attract damages of 5–25% per annum depending on the length of delay, plus 12% annual interest, under the EPF Act 1952. Employees’ State Insurance (ESI) delays carry 12% annual interest. State laws, including professional tax and shops-and-establishments rules, add their own fines, with prosecution possible under the labour codes.
State-level penalties vary, so payroll teams track them separately. Commenda’s statutory compliance guide for India payroll and HR teams maps the recurring EPF, ESI, and state filings that carry these charges.
What Are the Consequences of Non-Compliance for a Foreign Subsidiary in India?
Foreign-owned subsidiaries face every domestic penalty above plus a Foreign Exchange Management Act (FEMA) layer. FEMA contraventions can cost up to three times the sum involved, or ₹2,00,000 where the amount is not quantifiable, under FEMA 1999 (RBI). Unresolved filings also block profit repatriation and bank transactions, because authorised dealer (AD) banks will not process transfers without valid filings.
| Filing | Deadline | Consequence of default | Source |
|---|---|---|---|
| FC-GPR (Foreign Direct Investment, or FDI, reporting) | 30 days from share allotment | Reserve Bank of India (RBI) Late Submission Fee (LSF) | RBI |
| FLA return (Foreign Liabilities and Assets) | 15 July annually | FEMA non-compliance; blocks further FDI | RBI |
| APR (Annual Performance Report) for overseas structures | Annual | Bars further overseas remittance | RBI |
| Form 3CEB (transfer pricing) | With the tax return | Penalty up to 2% of transaction value for certain failures | Income Tax Department |
The knock-on effects reach the parent. AD banks refuse transactions, declared dividends stay trapped in India, and a US or listed parent carries governance and SOX-type reporting exposure when a subsidiary’s filings lapse. Commenda’s guides on setting up a subsidiary company in India and India transfer pricing cover the cross-border filings in detail.
How Does Compliance Enforcement Work in India?
Enforcement is automated first and human second. The MCA21 portal flags non-filing without manual review. The Goods and Services Tax Network (GSTN) cross-matches GSTR-1 against GSTR-3B and GSTR-2B. The Annual Information Statement (AIS) cross-verifies income data. Gaps surface by default rather than by audit, then escalate through show-cause notice (SCN), adjudication, and penalty.
The trend is toward civil penalties, not prosecution. The Companies (Amendment) Acts of 2019 and 2020 moved many offences to in-house monetary adjudication. The Section 92 civil-penalty regime took effect on 21 December 2020, and the Section 137 regime on 7 May 2018 (MCA). Appeals run from the adjudicating officer to the Regional Director, then the National Company Law Tribunal (NCLT).
How Can Businesses Avoid Compliance Penalties in India?
A single compliance calendar covering ROC, tax, payroll, and FEMA deadlines, with a named owner per filing and quarterly internal reviews, prevents the per-day fees that make up most penalty exposure. Foreign parents without a local finance team typically use managed compliance services. When a filing has an owner and a tracked due date, the per-day clock never starts.
- Build one calendar for every deadline. Cluster the 30 September dates first: the AGM, then the downstream AOC-4 and MGT-7 deadlines that key off it.
- Assign a named owner to each filing. Ambiguity, not difficulty, causes most missed deadlines.
- Run quarterly internal reviews. Catch gaps before the system flags them.
- Watch for amnesty windows. MCA’s Companies Compliance Facilitation Scheme 2026 (CCFS-2026) lets companies clear pending AOC-4 and MGT-7 filings at 10% of the additional fee, open through 31 August 2026 (MCA).
- Use managed compliance services if you have no local finance team. Commenda’s compliance calendar tool tracks deadlines by entity, and the best corporate compliance service providers in India 2026 guide compares provider options.
How Commenda Helps You Avoid Compliance Penalties in India
Commenda’s entity management platform tracks every Indian filing, deadline, and obligation across your entities, so ROC, tax, and FEMA due dates never live in a spreadsheet. If a filing is required, it is tracked. If it is tracked, it is handled. That certainty is what keeps the per-day clock from ever starting.
For foreign parents, Commenda pairs the platform with guides on setting up a subsidiary company in India and company incorporation services in India.
Book a demo to get a compliance calendar for your India entity and see every deadline you are currently exposed on.
