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Tax Planning For Setting Up New Business
Tax Planning For Setting Up New Business
1. Depreciation
Claim depreciation on assets acquired after 31.3.1997 on the basis
of actual cost instead of WDV method
Additional depreciation – 20% on actual cost
Exception
Industrial undertaking discontinued due to destruction of plant,
machinery and re-established before expiry of 3 years from end of
PY as a result of
•Flood, typhoon, hurricane, cyclone, earthquake
•Riot or civil disturbance
•Accidental fire or explosion
•Action by enemy (declaration of war)
HUF is entitled to the deductions from GTI u/s 80C, 80D, 80DD, 80DDB
and 80TTA
Firm or LLP
In computing the business income the following payments to the partners
are deductible:
•Interest on capital or loan not exceeding 12% p.a
•Remuneration to working partners not exceeding
•On first 3 lakhs of the book profits at 90% or 1,50,000 whichever is
more
•On balance of the book profits at 60%
•The share of a partner in the TI of the firm is exempt u/s 10(2A)
•A partner being an individual is entitled to the same deductions from his
GTI as discussed under individual.