Do matters related to taxation make you see stars in broad daylight? Well, fret not. Every start-up/ small business owner goes through a period of heightened ‘confusion’ regarding tax matters when he starts off as an entrepreneur. In the article below, we give you a basic guide on how you should compute your business income and what all expenditures are allowed to be deducted from the revenue that you earn or will earn in the course of your business. Note: This article aspires to serve only as a guide and as such, does not have an exhaustive list of items of expenditure that are allowed to be deducted in order to arrive at the business income for a particular assessment year. • Expenditure for Premises Used: Any amount spent towards rent for the premises used, repairs undertaken, any taxes/rates paid to municipal corporations and premium paid in respect of insurance against risk of damage or destruction of the premises. • Repairs & Insurance of Machinery/ Furniture: Amount spent towards current repairs of machinery or furniture and insurance premium paid in respect of insurance against risk of damage or destruction thereof. • Depreciation: Depreciation provided for tangible assets like premises, furniture, vehicle used for business, etc and non-tangible assets like know-how, patents, copyrights, trade-marks, licences, franchises or any other business or commercial rights of similar nature. • Preliminary Expenses: Expenditure in connection with preparation of feasibility report, project report, conducting market survey or any other survey necessary for the business and engineering services relating to the business. • Premium for Stocks/Stores: The amount of any premium paid in respect of insurance against risk of damage or destruction of stocks or stores used for the purposes of the business or profession • Interest on Loans: The amount of the interest paid in respect of capital borrowed for the purposes of the business • Payment for Provident Fund/Gratuity: Any sum paid by way of contribution towards a recognised provident fund or an approved superannuation fund and an approved gratuity fund • Bad Debts: The amount of any bad debt or part thereof which is written off as irrecoverable in the accounts for the previous assessment year • General: Any expenditure, not being in the nature of capital expenditure or personal expenses, laid out or expended wholly and exclusively for the purposes of the business including salary of staff, bills for the use of electricity, telephone, internet used for business purposes.
2012-09-05 00:00:00 2012-09-05 00:00:00 https://quickbooks.intuit.com/in/resources/money-finance/compute-business-income/ Money & Finance English https://quickbooks.intuit.com/in/resources/in_qrc/uploads/2017/05/Sep5th_How-to-Compute-your-Business-Income1.png How To Compute your Business Income
Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.