People often wonder if they can file their own taxes. Somehow, the complicated calculations involved scare most of us away. But, in certain cases it is in fact quite easy to manage your own accounts and file your own returns. Although administratively it will take up a lot of your time, in the long run it is always beneficial to know the procedure yourself.
Tax Filing For Entrepreneurs of Small Companies
When you own a company, you are liable to pay taxes on behalf of the company as the company’s proprietor.
The common taxes that companies attract are: Income Tax, Service Tax (Read Introduction to Taxes for Working Women in India: Part 3, Paying your Service Tax) Profession Tax, Tax deducted at source, and Sales Tax.
Every tax has its own set of rules which change regularly. You will have to constantly stay updated on the changes if you are going to file the taxes yourself.
As of today, companies are usually meant to pay their Service Tax once every quarter, their Tax deducted at source once every month, their Income Tax every quarter, and Profession Tax once every month.
Service Tax is a percentage calculated on the service provided in the particular quarter. The present rate of Service Tax is 12.36%.
Income Tax similarly is a percentage based on income earned.
Profession Tax is a tax cut from every employee’s salary to be paid to the Government. Delhi does not have the rule of Profession Tax, however most other states and Union territories do.
Tax deducted at source comes under various heads. Every bill you pay on behalf of the company to support running expenses incurs a tax. There are different amounts for different services and different TDS heads for every expense you incur. This TDS is cut from the amount you have to pay your supplier and is paid to the Government in turn.
Every company attracts different taxes and rules purely based on its scope of services and area of operation.
When companies operate in a SEZ (Special Economic Zone) several tax rules do not apply to them.
If you would like to file your own company taxes, be assured that it is definitely possible.