Online income tax return filing structure is important to decide before starting a new business. There are many business tax structures exist in India, from which you need to select one according to your business need. If it’s a start-up business then the best thing is to register it as a sole proprietorship as that will get you an immense benefit over taxation process. You will not have to pay any double tax or medical insurance premiums and it will have only one owner.
The very first thing to mention is starting proprietorship is less costly than starting a business in any other structure. Registering a business in this structure demands fewer registration fees and legal fees than registering as a partnership or PLC. It accelerates the startup process by simplifying the legal liabilities and also simplifies the online income tax return filing process for this type of businesses.
Regarding simplified taxation process, proprietorship businesses have one owner and it counted as his property. So, the taxation liabilities goes under owner’s personal tax liabilities and thus it does not require a separate tax return filing for the business. All the owner need to do is mention this business income into personal income during online income tax return filing.
This easy taxation process, not only simplifies the tax reporting liabilities but also saves businesses from double taxation. Unlike corporations, which comes under the double taxation policy, proprietorship income requires only one tax filing for every financial year. In corporation structure, first businesses file the tax return, and then profit gets distributed among the owners which are liable for online income tax return filing again. This makes the income liable to get taxed for double time.
Also, a sole proprietorship can deduct the amount of premium paid for health insurance from taxable income. Also, as it counted as owner’s personal income, it is eligible for all other personal deductions that one can claim for personal tax relief. Thus, makes it easy to provide health benefits for the employees and have an easy online income tax return filing experience.