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How Tax Planning can help a New Business in India?

Online Legal India LogoBy Online Legal India Published On 22 Mar 2021 Updated On 06 Jan 2023 Category Business Plan

In India, the growing economy and the availed man-power lead the way to incorporate a new business with not as much difficulty. But, it is advisable to apply a few effective apparatus like Tax Planning to run a new business successfully.

From the last few years, it is seen that the marketplace has become quite competitive and it is not an easy task to beat the competition and grow the business at the same time. With the developing technical boom, everyone is marking their presence in the search engines and thus the new business needs to become financially stable.

What is tax planning?

Tax planning is the systematic financial procedure to look at various taxation options to determine when, and in which way the business should be conducted so that the taxes can be eliminated or reduced legally.

The importance of tax planning for the new business entities in India has enhanced due to the risen market competition and the post-pandemic consequences. With the help of professional tax planners, a new business can reach its desired goal with ease.  

What is the importance of tax planning for a new business?

The purpose of tax planning for new business, however, is to help the budding entrepreneurs and the business personnel reach their financial goals. To conduct a business, it is not only enough to invest a notable amount of funds, the organization should maintain a positive flow of money too.

From the several benefits of tax planning for new business, a few can be penned down as:

  1. Track on your Expenses

The foremost thing to plan your taxes is to sincerely follow the areas where you have to invest and spend funds. Maintaining a record of such through Bookkeeping would be helpful in terms of controlling the cash-flow in a better way and saving taxes.

  1. Conduct an Inclusive Research

Saving taxes is quite complicated and challenging to be executed. At the first, you need to carry out thorough research on the taxation laws, guidelines, and amendments. If required, you may take assistance from any tax planning consultancy as well.

  1. Classify your business

As per the Income Tax Act, 1961 of the Indian Govt. there are different taxation slabs effective for different categories of business. By selecting from different types of company registration like Pvt. Ltd. business, Sole Proprietorship, One Person Company (OPC), you can effectively save taxes.

  1. Handle the Tax Filing Deadlines

If you complete your income tax return filing within the Govt. guidelines, it would avoid the late fine and help you save taxes for the budding business operation. For the same, it is advisable to be in touch with professional taxation experts.

  1. Home Office

A lot of entrepreneurs start their business journey using their home as the principal workplace. Following section 32 and section 37 of the Act, the business owners can claim the tax deduction on expenses related to office costing, utility bills, property laws, and mortgages.

 

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