Launching a business in India introduces multifaceted taxation—GST for indirect levies, income tax on profits, and TDS at source. Taxation services demystify these, enabling legal optimization from inception. This introduction equips new entrepreneurs with foundational knowledge.
Primary Tax Categories
GST registration in India thresholds at Rs. 20 lakh (goods)/10 lakh (services in specials states); composition scheme caps at 1.5% effective rate for turnover <1.5 crore. Regular taxpayers reconcile via GSTR-9 annual return by December 31.
Corporate income tax at 25% for domestic firms <400 crore turnover; new manufacturing units claim 15% under 115BAB. Proprietorships follow individual slabs up to 30% plus surcharge. MAT at 15% applies if book profits exceed regular tax.
TDS rates: 10% professional fees, 2% contracts; quarterly challans via OLTAS portal.
Filing Timelines and Processes
GST: GSTR-1 by 11th, 3B by 20th/22nd/24th based on state. ITR-4/3/5 by July 31; audit-extended to October 31. Belated returns attract Rs. 20/day cap at Rs. 5,000.
Presumptive taxation simplifies—no books needed if opting 44ADA (50% professionals). Startups get 3-year tax holiday on profits <100 crore post-DPIIT certification.
Optimization Techniques
Section 80JJAA deduction for new employment; 80IAC for eligible startups extends to FY26. Depreciation pools assets at 15-40%; carried forward losses offset 80% future profits. Angel investments qualify Section 56(2)(viib) exemptions.
Inter-state supplies trigger IGST; exports zero-rated with LUT filing. Transfer pricing for associates mandates Form 3CEB audit.
Risk Mitigation Strategies
Penalties: 100% tax evasion, 18% interest on delays. Maintain invoice-wise ledgers, e-way bills >50k value. Scrutiny assessments select via CASS; appeals to CIT(A) within 30 days.
Structure wisely: LLP pass-through taxation avoids DDT. Budget 2025 tweaks like extended presumptive limits aid scaling.
Proactive taxation knowledge transforms compliance into competitive edge for enduring entrepreneurial success.
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