How to save tax when income is above 50 lakhs?
Here are 9 benefits of trading in a corporate account: 🧵
Collaborated with @niki_poojary
1. Make a Pvt Ltd Company.
Form a company with family members and trade under it. The family members should be directors of the company. Will explain why later.
Why form a company?
You will only need to pay 25% flat tax. Individuals have to pay 30% tax above 10 lakh profits.
2. Surcharge Benefits:
You will be charged a lower surcharge in a corporate account.
Check the picture below:
Total Tax Outlay:
The total tax outlay for individuals is 30% plus surcharge. If you really earn a lot (10 cr +) then you will be paying 42% tax.
Whereas in a company you'll be paying a maximum of 28% tax.
This is how rich people save a lot of their money by paying low taxes.
3. Expenses can be deducted.
All expenses can be deducted from a company account.
Companies:
1. First make a profit.
2. then deduct the expenses
3. & Pay tax on the remaining income
Individuals:
1. First Profit
2. Then Pay tax
3. Expenses with whatever is left.