INTRODUCTION

Taxation laws are way too complex. Not only in the country, but all over the world it has become something which is not as simple as icing on the cake. Being the owner of the business, you will be earning from every head except from that of income from salaries. If you are not at all aware of all the tax saving modes, it may lead you to pay unnecessary taxes to government every year.

 Here are some tax-saving ideas you can adopt for your business:

1. Claim benefits of interest on housing loans- While building houses, many people out there thinks that taking bank loans might result in becoming an extra headache. But that’s not the case. From the POV tax, you can claim an interest as a deduction under section 80c along with other deductions up to rs. 150000. The gross value for tax purposes is marked as NIL and claiming deduction resultd in loss under the head department of ‘Income from house property’. This can be used to set off against incomes of other heads resulting in lesser overall taxable income.
2. Pay municipal taxes by cheque- Here, like wise the first point, municipal taxes can also be claimed as a deduction from income from house property. Mostly what we often tend to make a mistake is that people pay the taxes in cash and do not keep a copy of the payment receipts. However, paying of the municipal taxes allows you to claim its deduction and can be claimed even if you have lost the receipt as the same will be highlighted on your bank statement.
3. Proper recording of cash expenses- Many poor workers like some farmers or carpenters of normal labours in a factory get their daily wages in cash. So the factory floor and other indirect wages comprises of at least 40% of the manufacturing expenses and improper recording of such payments result in higher profits as a result of under-recoding of expenses.
4. Cash payments- We should not make payments above 20000 to a single person in a single day in cash. That restricts the deduction of expenses.
5. File your income tax return on time- Income tax department advices to file income tax return on time to access many benefits. One of the main benefits is to carry forward and get over with the losses on business income. You can carry on with the losses of business income for a consequtive period of 8 years and hence can go against the income of next years if the same is not set off against the incomes of the current year. Therefore, you can get hold off all the benefits of carrying forward of losses only when the income tax return is filed on or before due dates.
6. Claim Indexation- Indexation is the concept of time value of money, i.e, the value of rs 100 in today will not be the same after 5 years down the line. Now that if you want to sell something for example a land which you have purschased in 2005 for 5lakhs. Now in 2021 you want to sell it for 30lakhs. As it is a long tern capital gain, you must be thinking that you will be taxed upto 25lakhs then that’s not the case. Each year a Cost Inflation Index(CII) is used to calculate the indexed cost. CII of the year of sale is calculated by multiplied with the original cost and divided by CII of the year of purchase to get the indexed cost of acquisition.
7. Life Insurance Premium- Life insurance policy is a well known policy which provides us a security for our future endurings and benefits us with the returns on our investments. So there is another thing, i.e, the premium paid on life insurance of self, spouse and children can be withdrawn under the section of 80C along with other deductions subject to a maximum capacity of 1,50,000/-.
8. Public Provident fund- The oldest successful deposit scheme offered by the government of India as it provides a productive rate of interest very much similar to rates provided for a fixed deposit by normal banks. This ppf helps you to get quite a handsome amount of deduction uo tp rs 150000 along with other deductions of 80C. And moreover unlike fixed deposits, interest on ppf are even exempt from tax under section 10.
9. Medical Insurance premium- These are the policies provided by many leading insurance companies premium paid on medical insurance premium on self, spouse or children and parents can be claimed under section 80D subject to a maximum cap of 25000/-
10. To remain updated on recent developments- Well to remain aware about the recent rules and regulations doesn’t mean to get into hiring off any professional.you just need be updated with the basic informations a =nd changes happening in taxation rules such as slabs, rates of income taxes, implications of any new tax law to be introduced, etc.