Tax Planning Strategies for Small Business Owners - Startup Tax Suvidha

1. 7/24/23, 4:01 PM What Are Tax Planning Strategies for Small Business Owners and Entrepreneurs? – Startup Tax Suvidha STARTUP TAX SUVIDHA What Are Tax Planning Strategies for Small Business Owners and Entrepreneurs? June 1st, 2023 https://wordpress.com/post/startuptaxsuvidha.wordpress.com/17 1/8

2. 7/24/23, 4:01 PM What Are Tax Planning Strategies for Small Business Owners and Entrepreneurs? – Startup Tax Suvidha As an entrepreneur, you are responsible for fulfilling numerous obligations inherent in running a business. For example, your role may address human resources concerns one moment and resolve customer complaints the next. Juggling these diverse responsibilities can challenge staying abreast of less routine matters, such as tax-related obligations. As a result, small business owners consistently prioritise strategic planning, where accounting considerations offer various straightforward yet impactful methods to enhance their approach to tax planning. https://wordpress.com/post/startuptaxsuvidha.wordpress.com/17 2/8

3. 7/24/23, 4:01 PM What Are Tax Planning Strategies for Small Business Owners and Entrepreneurs? – Startup Tax Suvidha 5 Tax Planning Strategies for Small Business Owners and Entrepreneurs 1. Plan Investments and Tax Saving Schemes To optimise your tax savings under the Indian Income Tax Act, it is recommended to explore various investment options available. For example, you may think of investing in a tax-saving tool such as Public Provident Fund (PPF), National Savings Certificates (NSC), or tax-saving fixed deposits to avail deductions under Section 80C. Besides, you may also look into investing in schemes like the Employee Provident Fund (EPF) and National Pension Scheme (NPS) to enhance your tax-saving benefits further. It is advisable to discuss with a financial advisor to determine the most suitable investment options for your financial goals and tax-saving requirements. Advertisement https://wordpress.com/post/startuptaxsuvidha.wordpress.com/17 3/8

4. 7/24/23, 4:01 PM What Are Tax Planning Strategies for Small Business Owners and Entrepreneurs? – Startup Tax Suvidha 16 awesome Tradingview indicators in one Unlock 16 powerful TradingView indicators & elevate your trading! Get acres now for a small monthly fee. ? 2. Claim Input Tax Credit (ITC) If your business is registered under the Goods and Services Tax (GST) regime, it’s essential to remember that you can claim an input tax credit for the GST paid on your purchases. It can help you diminish your overall tax liability by offsetting the GST paid on inputs against the GST collected on sales. However, it’s crucial to maintain accurate records and comply with GST regulations to claim and retain the input tax credit. 3. Postpone Or Hasten Receipt Of Earnings Small businesses commonly use the cash method of accounting for their books and tax returns. According to this method, a company records income https://wordpress.com/post/startuptaxsuvidha.wordpress.com/17 4/8

5. 7/24/23, 4:01 PM What Are Tax Planning Strategies for Small Business Owners and Entrepreneurs? – Startup Tax Suvidha when it’s received and expenses when paid, that is when cash is exchanged. This approach provides some interesting tax planning strategies. If your business anticipates being in a lower tax bracket next year, it may be advantageous to defer income to the following year. Doing so lets you take benefit of the lower tax rate and reduce your liability. 4. Explore R&D Tax Benefits If your company is involved in (R&D) activities, exploring the tax benefits available under Section 35(2AB) of the Income Tax Act is recommended. This provision enables you to claim a deduction of 150% of the expenditure incurred on eligible in-house R&D activities. Moreover, the government has introduced the Patent Box regime, which offers a reduced tax rate of 10% on income derived from patents developed and registered in India. 5. Stay Compliant with Tax Deadlines It’s crucial to keep track of major tax deadlines and meet them to avoid penalties and interest charges. Failure to file tax returns on time can result in severe consequences. Therefore, reviewing the tax calendar regularly is https://wordpress.com/post/startuptaxsuvidha.wordpress.com/17 5/8

6. 7/24/23, 4:01 PM What Are Tax Planning Strategies for Small Business Owners and Entrepreneurs? – Startup Tax Suvidha recommended. Moreover, you need to ensure you file your tax returns, pay taxes, and submit any required documents within the prescribed deadlines. Final Words Despite the importance of tax planning, many small businesses neglect it. However, it is essential for one to follow above mentioned strategies to overcome any type of tax related issues. If you are a owner of small business and facing issues with tax related task it is vital for you to hire a professional today! Advertisements Occasionally, some of your visitors may see an advertisement here, as well as a Privacy & Cookies banner at the bottom of the page. You can hide ads completely by upgrading to one of our paid plans. UPGRADE NOW DISMISS MESSAGE Sponsored Content https://wordpress.com/post/startuptaxsuvidha.wordpress.com/17 6/8