Income Tax Planning for Micro and Small Business Ventures in India

Chosen theme: Income Tax Planning for Micro and Small Business Ventures in India. A practical, story-rich guide to help founders, shop owners, professionals, and transporters legally lower taxes, prevent penalties, and redirect savings into sustainable growth. Subscribe, ask questions, and share your situation so we can learn together.

Pick the Right Business Structure for Smarter Taxes

A sole proprietorship is quick to start and keeps compliance light. Profits are taxed under individual slabs, and resident individuals may get a full rebate up to ₹7 lakh under the current regime. Keep separate bank accounts and track expenses tightly, then ask us your questions about switching later.

Presumptive Taxation that Frees Your Time

Eligible businesses may declare presumed profits at 8% of turnover, or 6% for digital receipts, up to the enhanced turnover thresholds (potentially ₹3 crore where cash receipts stay within 5%). Books become simpler, but remember the five-year lock-in once you opt out. Tell us your turnover pattern for a tailored illustration.

Cash, Digital, and Audit Thresholds You Must Respect

Tax audit under Section 44AB generally triggers at ₹1 crore turnover, but expands to ₹10 crore if your cash receipts and cash payments each do not exceed 5% of total. Encourage UPI and bank transfers, and track petty cash carefully. Ask us about simple weekly cash controls that actually work.

Cash, Digital, and Audit Thresholds You Must Respect

Cash payments above ₹10,000 per person per day risk disallowance under Section 40A(3). Section 269ST restricts cash receipts of ₹2 lakh or more in aggregate. Sections 269SS and 269T also bar cash acceptance or repayment of certain loans and deposits. Need a plain-English poster? Subscribe and we’ll send one.

Deductions, Depreciation, and Real Incentives for MSMEs

Section 32 depreciation reduces taxable profit through asset blocks. Manufacturing units may leverage additional depreciation on new plant and machinery, while companies opting for 115BAA lose some incentives. Time purchases around year-end only if operational need exists. Share your capex plan, and we’ll draft a tax-smart phasing approach.

Deductions, Depreciation, and Real Incentives for MSMEs

Section 80JJAA allows an additional 30% deduction of eligible new employee cost for three years, subject to conditions like minimum employment period and social security compliance. It rewards formalization and stable hiring. Planning a team expansion? Tell us your roles and wages, and we’ll estimate potential deduction benefits.

TDS/TCS Essentials So You Don’t Lose Cash to Penalties

Who to deduct and when: 194C, 194H, 194J, and 194Q

Contractors under Section 194C, commissions under 194H, professionals under 194J, and purchases of goods above ₹50 lakh under 194Q each carry thresholds and rates. Map your vendors once, then auto-flag bills. Want our vendor-mapping spreadsheet and reminders? Comment “TDS map” and we’ll send the link.

Avoid double levy: 194Q vs 206C(1H) on goods

When both buyer TDS under 194Q and seller TCS under 206C(1H) could apply, the buyer’s TDS generally prevails. Align contracts so only one is applied, and annotate invoices. Share your turnover and counterparties, and we’ll suggest who should withhold, keeping relationships smooth and paperwork tidy.

A simple calendar that saved a bakery ₹18,000 in interest

A Bengaluru bakery missed two TDS deposits and paid interest. We set up a first-Friday calendar with bank standing instructions. Zero misses in a year. Their vendor trust improved too. Want the calendar template and a Form 26Q checklist? Subscribe and reply “calendar” to get both.

Advance Tax, Estimates, and the Peace of Paying on Time

Advance tax is due at 15%, 45%, 75%, and 100% by June 15, September 15, December 15, and March 15 respectively, if liability exceeds ₹10,000. Presumptive taxpayers can pay the whole amount by March 15. Unsure about estimation? Drop your margin and turnover; we’ll walk through a quick example.

Update a simple sheet monthly with revenue, gross margin, and overheads. Layer expected depreciation and eligible deductions, then project tax under your chosen regime. This clarity reduces panic. Want our free forecasting template with scenario toggles? Comment “forecast,” and we’ll send you the Google Sheet.

A two-van courier used to scramble in March. We split their profits into quarterly targets and buffered 10% for surprises. Their advance tax landed on time, and Section 234C interest vanished. Curious how the buffer works? Ask for the ‘March-less March’ playbook in the comments.

GST, Books, and Evidence That Protect Your Income-Tax Position

Keep mandatory books—cash, bank, sales, purchases, ledger, and stock—along with vouchers. Close monthly, reconcile bank statements, and file documents in a dated folder. This rhythm prevents year-end chaos. Want our printable month-end checklist? Subscribe and reply “close,” and we’ll deliver it to your inbox.

GST, Books, and Evidence That Protect Your Income-Tax Position

Match GSTR-1, GSTR-3B, and GSTR-2B with your books each month. Variances often reveal missing expense invoices or unrecorded income. Fixing them early protects both GST credits and income-tax deductions. Share your mismatch pain points, and we’ll suggest a quarterly routine that takes under an hour.