Last updated: July 17th, 2023 9:57 AM

Tax planning while setting up new businesses

Tax planning is a systematic financial procedure to look at the taxation options to determine when and which way the business is to be conducted so that the taxes can be eliminated or reduced. Tax planning is extremely important for new business entities that are to be set up in India and has become extremely important after the increasing market competition and the post-pandemic consequences. Professional tax planning is important for a new business to reach the desired goal.

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

Tax planning for a new business helps the entrepreneurs and the business personnel in attaining the financial goals. To conduct the business it is not only enough to invest a good amount of funds the organization is also required to maintain a positive flow of the money too. From the several benefits of new business tax return filings, here we have noted down a few: Track the expenses- The most important thing to plan is to follow the areas where you have to invest as well as spend funds. You can maintain a record of such through bookkeeping and it would be helpful in terms of controlling the cash flow in a better way to save taxes. Conduct inclusive research- Tax saving, as well as tax planning, is complicated and very challenging to be executed. At first, there is a need for research on the taxation laws, guidelines, and amendments. You can take assistance from any tax planning consultancy as well. Classify the business- As per the Income Tax Act, 1961 of the Indian Government the slab rates that are effective for different categories of business are different. By selecting the different types of company registration like Private Limited Company, SOle proprietorship, One Person Company and you can effectively save the taxes. Tax filing deadlines- When you complete the Income-tax return filing within the government guidelines you avoid the late fines and help in saving the taxes for the businesses. It is advisable to be in touch with experts like we have at IndiaFilings to manage the taxation part. Home Office- Many entrepreneurs start the journey of their business by using their home as a workplace. Sections 32 and 37 of the Act claim that the owners can claim a tax deduction on the expenses that are related to office costing, utilizing bills, property laws, and mortgages. The growing Indian Economy and the available manpower have to lead the way to incorporate a new business with not much difficulty. But it's better to opt for tax planning to run a business successfully. The marketplace becomes competitive and it is not an easy task to beat the competition and grow in the market. With the technical boom, the business is marking its presence in search engines and becoming quite competitive and is not an easy task to beat the competition and grow the business at the same time.