A tax is a charge by government on the income of an individual, corporation or trust as well as the value of an estate. There are also other kinds of forms of taxes like consumer sales taxes, use taxes and real estate taxes etc. The main objective in accessing the tax is to generate revenue to be used for the needs of the public. Every organization needs to pay the amount to the government on the basis of the income. This is mainly calculated on the basis of the income slab which is defined by the government. We have to pay the amount to run business perfectly without any problem in the business market. If you need the additional information about the topics, then you need to take the quality information through our assignment help for Taxation Law.
The following types of income are charged to tax under the heads profits and gains of business:
- Profits and gains of any business or profession.
- Any compensation or other payments due to or received by a person specified in section of the tax according to the guidelines of tax.
- Profit on sale of import entitlement licenses, incentives by way of cash compensatory support and drawback of duty.
- The value of any benefits or perquisites whether converted into money or not as well as business is arising or not in the business world.
- Any kind of interest, salary, bonus, commission or remuneration received by a partner of a firm.
- Any sum received under a key man insurance policy.
- Income from speculative transactions
- Deemed dividends on share are taxable under the head income of the business.
- Income from business or professional is chargeable to tax under this head inly if the business is carried on by assesses at any time during the previous year. This entire income is taxable and we have to pay the specific amount in the form of tax to government.
- Profit made by an assessed in winding up of a business is not taxable because we know that no business is carried on it that case. However, such profits may be taxable as capital gains or as business income, if the process of winding up is such as to involve the carrying on of a trade.
- Winning from lotteries, races etc. are taxable income and we have to pay the exact amount in the form of tax.
Tax Saving Tips for Business Owners
- Proper recording of cash expenses
- Stock Valuation
- Always deduct tax at source
- Cash Payments
- Deduct Income which are taxable in other heads
- File your income tax returns on or before the time
- Follow the concept of long term and short term capital gains
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