5 tips for saving tax in your business
TRANSCRIPT
KEEP AN ACCOUNT OF ALL POSSIBLE EXPENSES
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Keep track of all kinds of expense, whether
it is labours paid in cash or some
unprecedented machine/asset damage or
change. Keeping note of all expenses,
keep profits realistic and Tax in check
#1
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DEDUCT TAX AT SOURCE
As per the Income Tax Act of 1961,
the buyer needs to deduct tax at
the source before making any sort
of payment to the seller.
Failure to do so would result in the
entire expense being deemed
inadmissible thereby increasing
the taxation.
#2
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ACCOUNT FOR DEPRECIATION
Specific businesses as mentioned
under section 35AD can avail this
tax saving clause.
Businesses in the manufacturing
industries in particular that
purchase new machinery in a
particular year can claim upto an
additional 20% depreciation for
that year. Bringing down the
taxable amount significantly.
#3
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DEDUCT UTILITY BILLS
If you have a home office or use
your personal phone or car for
business you can declare all
expenses relating to it as business
expenses while filing taxes.
You can claim any cost incurred in
electricity, water, property tax,
phone, driver, tolls and parking
charges as a business expense and
save big on these.
#4
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INVEST IN INSURANCE POLICIES AND PPF
These are also great instruments when it comes to tax saving methods. A life
insurance policy can be claimed under section 80C and 80D respectively.
Public Provident Fund or PPF is a popular and trusted form of deposit
scheme. You can claim upto Rs. 1,50,000 along with other investments
under section 80C.
#5
