A major part of the population is interested in doing business as their main occupation. Nowadays, strict rules have been laid for starting a business and that too in the taxation sector. One must be aware of the different taxation law prevailing in the country or else, you might end paying up a greater part of your income as taxes to the government almost in a yearly manner.
Given below are some tax-saving techniques that can be applied to an entrepreneur for avoiding the unnecessary tax payment.
Cash received from house property
- Avail the benefits from housing loan. You should definitely advance loan that is available in the name of building houses. On this account, you can claim an interest deduction which means a cash reduction up to almost 1.5 lakhs which is really a good sum for the struggles. Moreover, you would not be charged with a gross value and can experience a less overall taxable income under the title ‘House property income’.
- Cheque payment of municipal taxes. The yearly taxes paid in terms of this corresponding sector can be claimed back under the same tag of housing property. Often, people pay the liquid cash but forget to keep to receipt and this would be later reflected on your bank receipt even if they sanction your claim.
Your business or personal occupation earnings
- Unorganized payment scheme. Most of the labor-intensive mechanical type of business does not follow an orderly pattern or mode of wage payment. Also, all the indirect wages go unnoticed. As a result of not listing the expenses, you are actually making a huge loss for yourself as a business owner because these can be claimed later. So, make sure you obtain the respective signatures from the workforce and also keep the proper cash receipts as records for producing while claiming the tax benefits.
- Validating the assets. All the stock items are usually valued at cost but if any short life piece exists, they are being exercised at a net realizable value which further prevents from getting overvalued. This difference could be made recognizable on taxes too. On the other hand, ensure that you follow a consistent value while evacuating such assets to avoid the attention of tax officers.
- Exclusive for the startup companies. Tax deductions prevail for those entry businesses that are experiencing their first year of installed machinery running. This is to specifically encourage the private sector financing for the public aid services like in the case of hospitals, highways and so on.