Taxable Business Income
February 8th, 2009
Question: What is the minimum taxable income in India? For a person and for a business, if different?
I am going to start a business and I am bit confused about the tax part. The money involved in my business has three components-
A - my service charge (the real amount paid in return to my service),
B - a deposit which is refundable. I deduct my service charge "A" from this and return the rest to client, and
C - the expenses in running the business/enterprise.1. Could you please tell me on what amount I am supposed to pay or calculate my eligibility to pay the taxes in India?
2. Is there any other rebate available to businesses, which I need to consider while calculating my eligibility to pay the taxes in India?Any other suggestions related to the tax or new business part are most welcome, since this is the first time I am going to start a business. It will be an internet based enterprise offering a particular service to its member across the globe, for a fee.
Answer: If you are planing your business as sole proprietor of the business, then the business income and your personal income if any like interest on deposits, salary income, capital gains from shares etc., will be clubbed. You have to file only one income tax return showing all the above said incomes. In this case you have to pay income tax as per slab rates. (after tax free income of Rs.1,10,000/-)
For men <65 years:
Rs............0 to 1,10,000 = Nil (Tax free)
Rs.1,10,001 to 1,50,000 @ 10%
Rs.1,15,001 to 2,50,000 @20%
Rs.2,50,001 & above @30%
Plus 3% Education cess on Tax amount
Plus 10% Surcharge on Tax if the income exceeds 10 lakhs.If you are planing for a parternership company, then parternership company has no tax free income and it has to pay tax for the entire amount @34% App.
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Tags: business, income, nonprofit, tax, taxes, unrelated taxable business income