Chhota CFO

What is a corporate tax?

A corporate tax is a tax imposed on a company’s profits. Taxes are levied on a company’s taxable income, which comprise revenue less the cost of goods sold (COGS) general and administrative (G&A) expenses, selling and marketing, R & D, depreciation and other operating costs.

Understanding corporate taxes:

As a result of the tax cuts and jobs act (TCJA), which president Donald Trump signed into law in 2017 and took effect in 2018, the federal corporate tax rate in the United States is now a flat 21%. Previously, the maximum corporate income tax rate in the United States was 35%.

Corporate tax deductions

Corporations are allowed to deduct certain essential and regular business expenses from their taxable income. All current operating expenses for the business are fully tax deductible. Purchases of investments and real estate with the intention of creating income for the business are also deductible.

Particular points to consider

The concept of double taxation is a major issue in corporate taxation. Certain corporations are taxed based on their taxable income. If this net income is transferred to shareholders, the dividends received will be subject to individual income taxes. Instead, a company can incorporate as an S corporation and have all the profits distributed to the shareholders. Because all taxes are paid through individual tax returns, an S corporation does not pay corporate tax.

The technique of recording and keeping track of your business’s financial transactions is known as bookkeeping. Your bookkeepers are required to compile financial resorts based on your company’s activity on a regular basis. These reports indicate your company’s financial situation as well as its performance.

In addition to managing financial records, bookkeeping services include:

1. Tax return preparation

2. Invoicing

3. Keeping track of performance indicators

4. Tidying up financial records

5. Keeping track of accounts owned and receivable

6. Management reporting

A bookkeeper’s job is to deliver accurate, up-to-date financial data to accountants so they can compile annual financial reports and tax filings for your company.

Services that bookkeeper can provide:

1. Data entry

2. Bank reconciliation

3. Accounts receivable, accounts payable and payroll

Hiring the best bookkeeping services

You have 3 options: employ a freelancer, hire a bookkeeping firm or adopt a remote bookkeeping solution. Each of them has its own set of advantages and disadvantages which will help you decide which is the best option for you.

Tips on how to hire the best bookkeeping services:

1. Consider experience

2. Ensuring proper education and training

3. Determine technical abilities

4. Consider paying attention to the details

5. Extensive cash flow and credit management experience

6. Planning and preparation of tax

You would register a company that runs a blog if you have a money-making blog. A blogging company must first be registered as a limited liability company, limited partnership, limited liability partnership, etc. it is not required that you use a Pvt ltd company or an LLP; you can also establish a simple solo firm, which is the finest legal entity for testing your ideas. You must register your trademark for your blog., even though it is not required.

There are 5 types of business registration:

1. Sole proprietorship firm

2. Partnership firm

3. Private limited firm

4. LLP

5. One-person company

Blogging Company registration process:

Step 1- obtain a certificate of digital signature (DSC)

The information technology act of 2000 contains provisions for the use of digital signatures on electronic documents to protect the security and authenticity of the papers filed electronically.

Step 2- acquire Director Identification Number (DIN)

With the addition of sections 266A to 266G of the Companies (Amendment) Act 2006, the notion of a director identification number (DIN) was introduced for the first time.

Step 3- create an account on the MCA portal by registering as a new user at mca.gov.in.

Step 4- form a corporation or file an application for a business license.

Some bloggers make money simply by having people click static or dynamic adverts or other embedded links on their blog pages that go to affiliate partner websites, or they get a commission when someone purchases a product or service on a partner website after clicking their link.

Essential points while filing income tax returns by NRIs:

1. The residential status of an NRI must be specified when it comes to ITR.

When filing ITR, NRIs must identify their residence tax status in India based on their time of stay throughout the fiscal year.

2. Selecting the correct ITR return form for NRIs

The ITR-1 form was created by the Indian government to make compliance saiser for taxpayers in the country. NRIs can also use the ITR-1 form to file their tax returns.

3. Aadhar number is not compulsory for NRIs

According to the Central Board of Direct Taxes, NRI citizens living in India are not required to include their aadhaar numbers while filing tax returns.

4. Include accurate assets and liabilities in ITR

NRs with a total of more than INR 5 million must report the cost of certain assets in India, as well as their associated liabilities, according to the assets and liabilities table.

5. It is optional to disclose a foreign bank account in ITR

Non-residents or non-citizens of India need not to declare details regarding their foreign bank account in ITR, if they do not claim a tax refund, according to a CBDT statement dated july 24, 2017.

6. Filing ITR is compulsory in case of exempt long term capital gain (LTCG)

Non-resident citizens should be aware that if their exempt LTCG income exceeds the basic tax exemption ceiling of INR 250,000 they must file an ITR, even if their total taxable income is less than the tax threshold limit.

Before we get to know about the Step by step procedure to register company in Bangalore let’s understand different types of company formations. Here are some of them listed for your reference:

Types of Company Registration-

The process of registration of companies with the permission of MCA is an online company registration process. It will help to make a way to the company and also saves time and energy.

Once you register with our company, our specialists will guide you in the process of registration. Firstly, we will analyze your business structure and then provide the right type of registration that suits your needs for business.

The registration process can be controlled by our team online. We can give you a surety of best service with proper skills and knowledge.

Steps to start Business:

1. Evaluation

Connect with our experts to assess your business needs and determine the best business and legal structure for you.

2. Documentation

By completing a few simple questions about your company, you can get a feel for how smooth our documentation process is.

3. Select services

Select the services you want us to manage while you concentrate on your business.

4. Make payment and get started

Just one more step to complete your payment and our team will take care of the rest.

People are always looking for ways to pay less taxes and they look for all possible ways – like getting in touch with the best tax consultants, hiring the best CA firm, or getting the information available on the internet.

Directions to save tax in India:

1. By claiming expenses

To save money on  income taxes, you will have to claim the expenses you have incurred.

2. Investing in tax-exempt securities

Here are Top 10 ways to save tax in FY 2020-21:

1. Income from agriculture:

2. HUF and extra income:

3. Provisions under section 80C:

4. Amount received as per voluntary retirement scheme:

5. When HRA is not a part of salary:

6. When HRA is a part of salary:

7. Distribution of profit in partnership firm

8. Money spent on donation to political party

9. Expenses for treating specific diseases

10. Amount from provident funds

These are some of the small tips to save on taxes but I am sure if you would like to save even more book a free call with our tax expert at Chhota CFO, Bangalore – where they will guide you each and every ways to save money on taxes.