Here are income tax saving for business or startup.
If you are a businessman or entrepreneur, then keep in mind the following points while filing your income tax return.
- If you want to save taxes on business travel, then from the next time , book your tickets and accommodation on the company’s expense and not from your account. This is considered a business expense and can be deducted from the taxable income of the company.
- Marketing expenses are eligible for tax deductions. Therefore, it is not a bad idea to increase the budget for marketing.
- Expenses on phones, vehicles, parking charges, driver’s salary, and so on are claimable if made purely for the business purpose.
- The premiums up to Rs 25,000 paid towards medical insurance can be claimed for tax deductions under Section 80D of the Income Tax Act, 1961. You can cover your spouse, children, and parents under this. This is not applicable if you run a startup in parallel to holding a full-time job where the employer provides medical insurance.
- In order to save taxes by making donations, you need to donate. But to the registered charities and funds such as the PM’s relief fund.
- If you pay a worker more than Rs 20,000 in cash in a single day, then that transaction will be deemed null by the income tax department. Therefore, your taxability increases. Hence, it is always advisable to pay your workers through bank transfer.
- Companies that are operating in the manufacturing sector are given additional tax benefits. Companies (under Section 35AD) installing new equipment and machinery installed over a year can claim up to 20% additional depreciation in addition to the regular depreciation in the year they were put in use. Depreciation will reduce your tax burden.
If you are starting a new venture and you want a comprehensive tax planning for your new business. Then, feel free to reach out to us on call or WhatsApp at 9460825477
