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Tax Savings under Different Structure (When the Annual Net Profit is upto Rs. 25 Lac)
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| SOLE PROPRIETORSHIP FIRM | LIMITED LIABILITY PARTNERSHIP (LLP) | Private Limited Company | |||
| Tax on 250000 | 0 | Profit Taxable in LLP
10% of 3 L 40% of balance 22L i.e Total 910000
Tax on Profit Taxable in LLP (31.2% of 910000) |
283920 | Profit Taxable in Company 4L
Tax 26% |
104000 |
| Tax on 2.5L-5L(5.20%) | 13000 | Tax Paid by Each Partner on Salary = (25L-9.10L)= 15.90/2 = 7.95 | Tax Paid by Each Director on Salary = (25L-4L)= 21L/2 = 10.5L – .50L Standard Deduction, Taxable 10L | ||
| Tax on 5L – 10L(20.8%) | 104000 | Tax on 2.5L | 0 | Tax on 2.5L | 0 |
| Tax on Above 10 L (31.2%) | 468000 | Tax on 2.5L-5L(5.20%) | 13000 | Tax on 2.5L-5L(5.20%) | 13000 |
| Tax on 5L – 7.95(20.8%) | 61360 | Tax on 5L – 10(20.8%) | 104000 | ||
| Tax By 1 Partner | 74360 | Tax By 1 Director | 117000 | ||
| Tax by 2 Partner | 148720 | Tax by 2 Director | 234000 | ||
| Total Tax (Tax in LLP +Tax by 2 Partner) | 338000 | ||||
| Tax On Profit Available in Company if Distributed as Dividend
(4L-1.04L)*20.56% |
60858 | ||||
| Total Tax | 585000 | Total Tax (Tax in LLP +Tax by 2 Partner) | 432640 | Total Tax (Tax in Company +Tax by 2 Director+ Dividend Tax) | 398858 |
| Additionally What We can CLaim | |||||
| 80C, 80D, 80GGA (Rent –Max 60000), NPS | 80C, 80D, 80GGA (Rent –Max 60000), NPS | 80C, 80D, (HRA , Max Rent Paid -10% of Basic Salary), NPS By Each Director | |||
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