How to plan tax for a sole proprietor small business

Respected Members,

I am owner of small sole proprietor business, basically i working as freelancer from some uk and USA clients they paid me via paypal or NFT in my current account. I just started my business from april 2016 and expected gross turnover around Rs. 15,00,000 - 20,00,000.. aprox 5 - 6 people working with me and they are also part-time worker and i paid them for every individual project from my current account via NFT or IMPS. But i need proper help to plan my tax for whole, how i pay them so that i have to pay less tax. 

Also let me how much TDS i have to deduct from my worker though they are not agree to pay TDS.

Please help me

Thanks ans Regards, 
Tarun Darbar.

Asked 7 months ago in Income Tax from Kolkata, West Bengal
Dear Sir,

You can pay them their share of money in the name of professional charges paid and no tds shall be deducted on the same unless you are a Firm, LLP or Pvt Ltd Co. 

In order to plan your taxes well we need to understand your whole business model after which we will be able to guide you in the best possible manner. 

Trust this clarifies your query. 

Feel free to get back/ call back in case of further details. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, ACA, LLB - GEN, CERT. FAFP
Rohit R Sharma
CA, Mumbai
706 Answers
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Dear Tarun,

Your payment comes under the preview of professional fee. TDS on professional fee should be deducted @10% if the annual payment of professional fee exceeds Rs.30000. However you are not required to deduct the TDS.

In your case, since you are an individual and not liable to tax audit, you are also not liable to deduct TDS under section 194J. 

For other plannings, we need to understand your business operations, whether you are eligible for presumptive taxation or not. We need to calculate the taxes in both the scenario. It will require calls exchange of emails etc

Please feel free to get in touch with me, if you need nay additional clarification on the above.

Thanks and Regards,
CA Abhishek Dugar
Caabhishekdugar@gmail.com
Abhishek Dugar
CA, Mumbai
755 Answers
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Hey Tarun,

Since you are a sole proprietor there is no need to deduct TDS on  any sort of payment till you become liable for TAX Audit.

So do not worry about the TDS part. You can pay them Comission/ Professional Fees anything.

It will be difficult to give you a overall commentary and tax saving measures unless we understand your business well.

A small heads up, as you mentioned that your Turnover could be around Rs.15-20L, do remember to apply for a Service Tax Number as soon as you cross Rs.9 Lacs, to avoid complications.

Trust this clarifies your query. 

Feel free to get back/ call back in case of further details. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, ACA, LLB - GEN, CERT. FAFP
Rohit R Sharma
CA, Mumbai
706 Answers
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looks like you are in conversation with our other professional colleague. Let the same continue.
Shyam Sunder Modani
CA, Hyderabad
953 Answers
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Dear Sir,

You should definitely deduct TDS of the professionals you have hired for your Business Concern. 

You may show them as your employer and accordingly deduct TDS or you may deduct TDS on payment made to Professionals @10% if the amount is equal to or above Rs. 35000.

Thanks and regards

Shiv Kumar Agarwal
CA, Delhi
195 Answers
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