Entrepreneurs and business owners must pay income tax on the profits made from their ventures. This can be a substantial sum, and they are looking for deductions and exemptions to reduce their tax liability.

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Here, we will discuss the impact of GST.

Top Tax-Saving Tips for Entrepreneurs:

Hire Your Relatives:

Hiring family members can be a significant step toward lowering taxes. They can be paid salaries in the same way that other employees are. If the family members hired by the company have no other source of income, the company can only pay them Rs 2,50,000 per year. It will confirm that they are not instructed to pay taxes. Because employee salaries are a cost to the company, they can be set off against the taxable income, lowering the enterprise’s overall tax outgo.

Accommodation and Travelling:

Entrepreneurs frequently travel to places for business purposes. It is done more extensively when entrepreneurs have branches in multiple cities. If you want to save money on taxes, book your travel tickets and accommodations at the company’s expense rather than your own. It is a business expense that can be deducted from the company’s taxable income.

Invest More in Marketing:

If you are still using traditional marketing methods? It is the right time to switch to digital marketing because it allows you to reach out to more potential customers, increasing the likelihood of finding new customers. It will also help you save money on taxes because marketing expenses are tax deductible. 

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Business Utilities:

Business owners who use their vehicles and phones can claim these as utility expenses. For example, expenses for phones, vehicles, parking fees, and driver’s salary are deductible if they are used solely for business purposes. Electricity expenses are also deductible if you own your home. It will assist in lowering the tax burden.

Preliminary Expenses:

All expenses incurred before the establishment of the enterprise are deductible under Section 35D of the Income Tax Act. These are recorded as preliminary expenses and are deductible from taxable income for five years.

Convenience Expenses:

If you frequently use vehicles and phones for business purposes, these costs are deductible as business expenses on your company’s books.

Regular Expenses:

If you run your business from home, you can deduct your electricity costs as a business expense. Furthermore, you can deduct expenses incurred as a result of an internet connection, as well as rent.

Conclusion:

Now you would have understood the Top Tax-Saving Tips for Entrepreneurs. So, to have a better understanding of GST, you can join GST Classes in Chennai and equip yourself with its future scope.