Use Section 44AD to reduce the compliance burden of your small business

Small business owners spend most of their time and energy in making their business big and successful. Regular tax assessment and maintaining account books are a costly and tedious affair for them. Section 44AD was introduced to reduce the compliance burden for small businesses and promote ease of doing business. This section makes tax filing simple and easy for small business owners. Section 44AD of the Income Tax Act allows you to pay tax at a fixed rate of your total turnover so you don’t have to maintain an account…

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What taxes are you supposed to pay on commission earned?

Section 194H of the Income Tax Act is levied on income through commission, except commissions on insurance sales. TDS deduction rate Currently, 5% TDS is applied on a payment without any surcharge or education-related cess. If the person deducting the amount does not provide PAN details, then a TDS of 20% is levied. No TDS is required if the total brokerage or commission amount is less than Rs. 5000 in a year. Nil TDS or Lower TDS rate In some cases, you may not have any taxable income. So if…

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Taxes paid on Interests earned

Section 194A of the Income Tax Act (IT Act) covers tax deducted at source (TDS) on the interests accrued on fixed deposits and other financial instruments, except securities. Interest payments made to non-residents are not under the purview of this section. Main features of Section 194A The main features of Section 194A are: · Any resident Indian receiving interest (except interest on securities) must pay TDS. · If a Hindu Undivided Family (HUF) or an individual is liable for audits of his/her accounts, then TDS must be deducted on interest…

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Know about the taxes deducted under Section 194C

Section 194C of the Income Tax Act is tax deducted at source (TDS), that is, from payments you receive if you fall under the “contractors” or “subcontractors” category. So, the entity paying you must deduct tax at the time of making the payment. Here are the following types of entities responsible for deducting taxes from payments towards contractors and subcontractors: · A company · A firm · A trust · Central or State government · A university · A corporation · Co-operative societies · Registered societies · A government-mandated authority…

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ITR filings: Claim Section 80DDB tax deductions

Under Section 80DDB, you can claim tax deductions for yourself or your spouse, children, parents or other dependant family members of the Hindu Undivided Family (HUF) towards treatment costs for specific ailments. The amount that you can claim as a deduction under Section 80DDB is proportional to the age of the person for whom the medical treatment is required, and his or her degree of disability. For individuals below 60 years of age, the amount is capped at Rs. 40,000. For people over 60 years of age, the deductible limit…

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Get tax deductions on your housing rentals!

House rent can be a huge part of one’s regular expenditure. For most salaried people, the HRA (house rent allowance) paid by the employer helps in meeting the rents. The Income Tax (IT) Act has provisions to claim tax deductions for the HRA component in their salary. Section 80GG was designed to ensure people who do not receive HRA, such as self-employed professionals, and also get tax deductions if they pay house rent. Section 80GG: Main features Section 80GG is a provision in the IT Act that states that an…

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