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Tax Planning
Tax Planning
Tax Planning
While setting up a new business, one has to consider the location of the
business and the nature of the business.
Tax Holidays and Deductions under Incometax are the main tax
planning tools which are considered while setting up a new business.
Tax factor also plays an important role in taking such decision. A tax
holiday is a temporary reduction or elimination of a tax.
From the AY 2006-2007, tax holiday for profits derived from the export
of articles or things manufactured in units set up in Special Economic
Zone is available for 15 years, 100% during the first 5 years, 50% during
the next consecutive 5 years and during the last 5 years, such percentage
profit, not exceeding 50% as is transferred to Special Economic Zone
Re-investment A/c to be utilised for purchasing machinery and plant
during the immediately succeeding period to 3 years [Sec. 10AAJ.]