Tax Planning Tips for Small Businesses

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Published Date:  03-12-2023   Updated on:  03-12-2323    Author:   prarabdh-gupta
captainbiz tax planning tips for small businesses

Taxes are one of the most extensive complexities in India, especially for small businesses, because of a lack of resources and professional guidance. In simple words, taxes create financial hindrances for companies to expand and manage their expenses. Thus, it is required for small businesses to maintain their taxes in order to reduce tax liabilities properly.

In this article, we have mentioned the best possible tax planning tips for businesses in India. It will allow you to lower your taxes in different conditions significantly. Moreover, we have also mentioned a complete tax planning calendar for small businesses in India for the Financial Year (FY) 2023-24.  Without any delay, let’s get to know about these taxes !! 

Tax Planning Calendar for Small Businesses in India

Here, we have covered the entire tax compliance calendar for the financial year 2023-24. It consists of all the important dates regarding Income Tax, GST (GSTR1 & GSTR3B), TDS, ROC, and general accounting for small businesses, individuals, and professionals.

Date  April 2023
09-04-2023 Businesses have to set up Online Accounting Software for FY 2023-24
10-04-2023 Start IT eFIling for FY 2022-23 (AY 2023-24)
10-04-2023 Business have to take care of Professional Tax (PT) for March 2023

NOTE: Taxes may vary based upon state to state 

11-04-2023 File the GSTR 1 (Monthly Basis) for March 2023
13-04-2023 File GSTR-1 for QRMP (January-March 2023)
15-04-2023 Take care of PF (Provident Fund) & ESI Returns Payment for March 2023
18-04-2023 CMP 08 Composition for January to March 2023
20-04-2023 File GSTR 3B (Monthly Basis) for March 2023
22-04-2023 File GSTR 3B for South India (January to March 2023)
24-04-2023 File GSTR 3B for North India (January to March 2023)
30-04-2023 Date to Opt in or Opt out of GST Quarterly scheme (Apr-Jun 2023)
30-04-2023 TDS Payment in Form 26QD (Contractor Payments), 26QC (Rent), 26QB (Property) for March 2023 
30-04-2023 TDS Payment (Mar 2023)
30-04-2023 File GSTR-4 for Composition taxpayers for FY 2022-23

 

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Date  May 2023
07-05-2023 TDS Payment (for Apr 2023)
10-05-2023 Businesses have to take care of the Professional Tax (PT) over the Salaries (for Apr 2023)  
11-05-2023 File GSTR 1 for April 2023 (Monthly)
13-05-2023 File GSTR 1 IFF for QRMP for April 2023 (Optional)
15-05-2023 TCS Return in Form 27EQ (Quarterly) (January to March 2023)
15-05-2023 Take care of the Provident Fund (PF) & ESI Returns (April 2023)
20-05-2023 File GSTR 3B (Monthly) for Apr 2023
25-05-2023 File GST Challan Payment for April 2023 (if no sufficient ITC) for Quarterly Filers 
30-05-2023 Form 11 for LLP’s FY 2022-23
30-05-2023 TDS Payment in Form 26QD (contractor payments), 26QC (Rent), 26QB (Property) for April 2023
30-05-2023 TCS Certificates issues in Form 27D (January to March 2023)
31-05-2023 TDS Return in Form 24Q, 26Q, and 27Q (January to March 2023)
31-05-2023 Due date for furnishing of statement u/s 285BA for FY 2022-23 (for Banks etc.)

 

Date  June 2023
07-06-2023 TDS Payment (May 2023)
10-06-2023 Business has to take care of Professional Tax (PT) on Salaries (May 2023)
11-06-2023 File GSTR 1 for May 2023 (Monthly)
13-06-2023 File GSTR 1 IFF for QRMP for May 2023 (Optional)
15-06-2023 Advance tax Payment (1st Installment) for April-June 2023
15-06-2023 Take care of the Provident Fund (PF) & ESI Returns (May 2023)
15-06-2023 TDS Certificate Form 16/16A Issue (January-March 2023)
20-06-2023 GSTR 3B (Monthly) for May 2023
25-06-2023 File GST Challan Payment for May 2023 (if no sufficient ITC) for Quarterly Filers 
30-06-2023 Form DPT 3 for Companies (FY 2022-23)
30-06-2023 TDS Payment in Form 26QD (contractor payments), 26QC (Rent), 26QB (Property) for May 2023
30-06-2023 Renewal of IEC Code 

 

Date  July 2023
07-07-2023 TDS Payment (for June 2023)
10-07-2023 Businesses have to take care of the Professional Tax (PT) over the Salaries (for June 2023)  
11-07-2023 File GSTR 1 for June 2023 (Monthly)
13-07-2023 File GSTR 1 QRMP (Apri-June 2023)
15-07-2023 TCS Return in Form 27EQ (April-June 2023)
15-07-2023 Take care of the Provident Fund (PF) & ESI Returns (June 2023)
18-07-2023 CMP 08 Composition for April to June 2023
20-07-2023 File GSTR 3B (Monthly Basis) for June 2023
22-07-2023 File GSTR 3B for South India (April to June 2023)
24-07-2023 File GSTR 3B for North India (April to June 2023)
30-07-2023 TCS Certificates in Form 27D issue (April-June 2023)
30-07-2023 TDS Payment in Form 26QD (Contractor Payments), 26QC (Rent), 26QB (Property) for June 2023 
31-07-2023 Income Tax Returns for Individuals, Non Corporates who are not liable to Tax Audit (FY 2022-23)
31-07-2023 TDS Return in Form 24Q, 26Q, 27Q (April-June)
31-07-2023 TDS Return in Form 24Q (April-June 2023)
31-07-2023 Filing INC 22A for Companies 
31-07-2023 Form DPT 3 for Companies (FY 2022-23)

 

Date  August 2023
07-08-2023 TDS Payment (for July 2023)
10-08-2023 Businesses have to take care of the Professional Tax (PT) over the Salaries (for July 2023)  
11-08-2023 File GSTR 1 for July 2023 (Monthly)
13-08-2023 File GSTR 1 IFF for QRMP for July 2023 (Optional)
15-08-2023 TDS Certificate in Form 16A Issue (April-June 2023)
15-08-2023 Take care of the Provident Fund (PF) & ESI Returns (July 2023)
20-08-2023 GSTR 3B (Monthly) for July 2023
25-08-2023 File GST Challan Payment for July 2023 (if no sufficient ITC) for Quarterly Filers 
30-08-2023 TDS Payment in Form 26QD (Contractor Payments), 26QC (Rent), 26QB (Property) for July 2023 
31-08-2023 GST Amnesty Scheme considering GSTR 4, GSTR 9, 9C, GSTR10 etc.  

 

Date  September 2023
07-09-2023 TDS Payment (Aug 2023)
10-09-2023 Business has to take care of Professional Tax (PT) on Salaries (Aug 2023)
11-09-2023 File GSTR 1 for Aug 2023 (Monthly)
13-09-2023 File GSTR 1 IFF for QRMP for Aug 2023 (Optional)
15-09-2023 Advance tax Payment for July-September 2023
15-09-2023 Take care of the Provident Fund (PF) & ESI Returns (Aug 2023)
20-09-2023 GSTR 3B (Monthly) for August 2023
25-09-2023 File GST Challan Payment for August 2023 (if no sufficient ITC) for Quarterly Filers 
27-09-2023 One Person Companies File AOC 4 for FY 2022-23 (OPC)
30-09-2023 Form 3CB-3CD and 3CA-3CD Audit Report for Non Corporate and Corporate (FY 2022-23)
30-09-2023 Companies Annual General Meeting (AGM)
30-09-2023 DIR 3 KYC for Directors of Company’s and LLP’s
30-09-2023 TDS Payment in Form 26QD (Contractor Payments), 26QC (Rent), 26QB (Property) for August 2023 
30-09-2023 TCS Return in Form 27EQ (April-June 2023)
30-09-2023 TDS Return in Form 26Q, 27Q (April-June 2023)

 

Date  October 2023
07-10-2023 TDS Payment (for September 2023)
10-10-2023 Businesses have to take care of the Professional Tax (PT) over the Salaries (for September 2023)  
11-10-2023 File GSTR 1 for September 2023 (Monthly)
13-10-2023 File GSTR 1 QRMP (July-September 2023)
14-10-2023 File ADT-1 (Appointment of an Auditor for Companies)
15-10-2023 TCS Return in Form 27EQ (July-September 2023)
15-10-2023 Take care of the Provident Fund (PF) & ESI Returns (September 2023)
15-10-2023 TCS Certificate in From 27D Issue (April-June 2023)
18-10-2023 CMP 08 Composition for July to September 2023
20-10-2023 File GSTR 3B (Monthly Basis) for September 2023
22-10-2023 File GSTR 3B for South India (July to September 2023)
24-10-2023 File GSTR 3B for North India (July to September 2023)
29-10-2023 File AOC 4 for Companies (FY 2022-23)
30-10-2023 File Form 8 for LLP’s (FY 2022-23)
30-10-2023 TDS Payment in Form 26QD (Contractor Payments), 26QC (Rent), 26QB (Property) for September 2023 
30-10-2023 TCS Certificate in Form 27D Issue (July-September 2023)
31-10-2023 Non Corporate’s Income Tax Returns who requires Audit and Corporates (FY 2022-23)
31-10-2023 TDS Return in Form 24Q, 26Q, 27Q (July-September 2023)

 

Date  November 2023
07-11-2023 TDS Payment (Oct 2023)
10-11-2023 Business has to take care of Professional Tax (PT) on Salaries (October 2023)
11-11-2023 File GSTR 1 for October 2023 (Monthly)
13-11-2023 File GSTR 1 IFF for QRMP for October 2023 (Optional)
15-11-2023 Take care of the Provident Fund (PF) & ESI Returns (October 2023)
15-11-2023 TDS Certificate in Form 16A Issue (July-September 2023)
20-11-2023 GSTR 3B (Monthly) for October 2023
25-11-2023 File GST Challan Payment for October 2023 (if no sufficient ITC) for Quarterly Filers 
29-11-2023 File MGT 7/7A for Companies & OPC (FY 2022-23)
30-11-2023 Renewal of Labour License for Calendar Year 2024 (January-December 2024)
30-11-2023 TDS Payment in Form 26QD (Contractor Payments), 26QC (Rent), 26QB (Property) for October 2023 

 

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Date  December 2023
07-12-2023 TDS Payment (November 2023)
10-12-2023 Business has to take care of Professional Tax (PT) on Salaries (November 2023)
11-12-2023 File GSTR 1 for November 2023 (Monthly)
13-12-2023 File GSTR 1 IFF for QRMP for November 2023 (Optional)
15-12-2023 Advance tax Payment for October-December 2023
15-12-2023 Take care of the Provident Fund (PF) & ESI Returns (November 2023)
20-12-2023 GSTR 3B (Monthly) for November 2023
25-12-2023 File GST Challan Payment for November 2023 (if no sufficient ITC) for Quarterly Filers 
30-12-2023 TDS Payment in Form 26QD (Contractor Payments), 26QC (Rent), 26QB (Property) for November 2023 
31-12-2023 Belated and Revised Income Tax Filing Due Date for Non Corporate’s and Corporate’s (2023-24)
31-12-2023 File GST Annual Returns (GSTR-9 & 9C) for FY 2022-23

 

Date  January 2024
07-12-2023 TDS Payment (for December 2023)
10-12-2023 Businesses have to take care of the Professional Tax (PT) over the Salaries (for December 2023)  
11-12-2023 File GSTR 1 for December 2023 (Monthly)
13-12-2023 File GSTR 1 QRMP (October-December 2023)
15-12-2023 TCS Return in Form 27EQ (October-December 2023)
15-12-2023 Take care of the Provident Fund (PF) & ESI Returns (December 2023)
18-12-2023 CMP 08 Composition for October-December 2023
20-12-2023 File GSTR 3B (Monthly Basis) for December 2023
22-12-2023 File GSTR 3B for South India (October to December 2023)
24-12-2023 File GSTR 3B for North India (October to December 2023)
30-12-2023 TDS Payment in Form 26QD (Contractor Payments), 26QC (Rent), 26QB (Property) for December 2023 
30-12-2023 TCS Certificate in Form 27D Issue (October-December 2023)
31-12-2023 TDS Return in Form 24Q, 26Q, 27Q (October-December 2023)

 

Date  February 2024
07-01-2024 TDS Payment (January 2024)
10-01-2024 Business has to take care of Professional Tax (PT) on Salaries (October 2023)
11-01-2024 File GSTR 1 for January 2024 (Monthly)
13-01-2024 File GSTR 1 IFF for QRMP for January 2024 (Optional)
15-01-2024 Take care of the Provident Fund (PF) & ESI Returns (January 2024)
15-01-2024 TDS Certificate in Form 16A Issue (October-December 2023)
20-01-2024 GSTR 3B (Monthly) for January 2024
25-01-2024 File GST Challan Payment for January 2024 (if no sufficient ITC) for Quarterly Filers 

 

Date  March 2024
02-02-2024 TDS Payment in Form 26QD (Contractor Payments), 26QC (Rent), 26QB (Property) for January 2024 
07-02-2024 TDS Payment (February 2024)
10-02-2024 Business has to take care of Professional Tax (PT) on Salaries (February 2024)
11-02-2024 File GSTR 1 for February 2024 (Monthly)
13-02-2024 File GSTR 1 IFF for QRMP for February 2024 (Optional)
14-02-2024 Founder’s Day @ EZTax.in
15-02-2024 Advance Tax Payment (January-March 2024)
15-02-2024 Tax Planning and Book Closure Plan (FY 2023-24)
15-02-2024 Take Care of Provident Fund & ESI Returns and Payment (February 2024)
15-02-2024 Form 13 (Nil / Lower TDS) for FY 2023-24
20-02-2024 File GSTR 3B (Monthly Basis) for February 2024
25-02-2024 File GST Challan Payment for February 2024 (if no sufficient ITC) for Quarterly Filers 
30-02-2024 TDS Payment in Form 26QD (Contractor Payments), 26QC (Rent), 26QB (Property) for February 2024 
31-02-2024 Updated ITR Last Date for FY 2020-21. 

NOTE: Updated ITR Last Date for FY 2021-22 would be 31st March. Updated ITR Last Date for FY 2022-23 would be 31st March 2026. 

6 Benefits of Tax Planning Software for Small Businesses in India

Tax planning software is like taking one step ahead towards the utilization of artificial intelligence and machine learning in the operational activities of business. Here, we have mentioned certain essential benefits of tax planning software in India. 

1. Accuracy and Compliance 

The tax planning software allows businesses to automate their complex calculations and ensure accurate financial computations. It significantly reduces the risk of human error and boosts the accuracy of financial reporting and tax filing. Therefore, software works as the fundamental pillar for small businesses. Tax planning software also helps companies align with ever-evolving tax rules and regulations. This means it automatically reads the changing tax laws and regulations and allows the businesses to maintain compliance with the current legal requirements. It leads companies to lower the chances of facing legal penalties and audits.  

2. Time-Saving 

Tax planning is a very time-consuming but essential aspect of financial management. The tax planning software comes into play and solves this problem for the businesses. They can easily automate various tasks of businesses, including data entry, calculations, documentation, etc., and significantly reduce the time and effort of their financial processes. Simply put, the tasks that have required the workforce can easily be streamlined now, allowing you to allocate your resources more efficiently. During the tax season, the software will smoothly process and organize your financial data to prepare your tax reports on time and file the returns before the deadline. This time-efficient approach helps small businesses to spend more time focusing on developing strategies for business growth. 

3. Forecast and Planning 

Tax planning software not only helps businesses by documenting and managing their information but also allows them to predict future tax liabilities. In this way, this software even utilizes historical financial data to develop effective strategies. Software regularly analyzes the changes in revenue, expenses, income, and tax laws and regulations. This forecasting feature helps the business to be prepared for budgeting purposes and create a separate fund for future tax payments and any other financial surprises. In simple terms, forecasting and planning allow businesses to make informed decisions. In fact, businesses can adjust their financial strategies and tackle economic conditions.  

4. Documentation and Record-keeping 

Documentation and record-keeping are one of the primary fundamental steps of financial management. Tax planning software is the master in systematically organizing the financial data of the company, including its income statement, receipts, expense reports, and more. Along with managing the data, this software also allows businesses to store information in a secure and easily accessible place. Hence, you can easily use this information to create an accurate and comprehensive audit trail for your business. Plus, you can also monitor your documents and business information from time to time to enhance your company’s transparency and accountability. Therefore, you can expect a well-organized and reliable documentation system for your business with the help of these tax planning software.

5. Cost-Effectiveness 

Tax planning software mainly helps businesses streamline their financial management process and reduce the requirement to use external services. When you can automate all your financial processes with just the help of software, you don’t require many employees in this aspect of your business. Hence, it allows you to save a lot of money that would be spent on managing the workforce. Small businesses can better utilize this software and save a lot of money instead of wasting it on additional staff. However, you would still need professional assistance to check and verify all your accounts from time to time. But it wouldn’t be that costly. You can use the software of a one-time payment or subscription-based model on the basis of your needs and requirements. Plus, when you save your costs, you ultimately boost your profit margins.  

6. Easy Audit Preparation 

Audit preparation is one of the essential tasks carried out by tax planning software. All the businesses have to be periodically audited by tax authorities or external entities. The software appropriately manages and organizes the financial records, including its transactions, expenditures, and revenue. With the help of this software, you can smoothly and quickly retrieve the required data and present it during the audit. It can also help you generate detailed reports, track timely changes, and prepare accurate historical records for better demonstration. Plus, it will also help you to find out and rectify certain irregularities. Therefore, it gives the company confidence in the audit following all the regulatory requirements.

7 Best Tax Planning Tips for Small Businesses that are Growing Rapidly

Growing businesses generally have more responsibilities over their shoulders, which makes the founders and leading managers focus more on the business rather than tax planning. However, it can lead your business to create a bad image and book heavy tax liabilities in the market.

Here, we have mentioned certain tax planning tips suggested by tax professionals to reduce your tax liabilities legally:

1. Maintain Your Business Expenses 

Generally, the businesses that are growing rapidly have various expenses depending upon their revenue. At this point, they can take the help of the Income Tax Act and claim the required deductions over those expenses. It simply means that you can easily save taxes on those expenses. To claim these deductions, you have to maintain proper business transaction records.  

2. Late Tax Filing can Lead You to Penalty

In the growth phase of any business, founders and leading managers generally forget to file the required taxes on the required deadlines. Thus, you should forget the importance of tax deadlines, as they can let you face a penalty. Therefore, it is one of the crucial tax planning tips for small businesses that are growing rapidly in India. 

3. Must Hire a Professional 

When a business is in its growing phase, you have to take care of multiple things at a time. It is the phase when you require the right guidance and proper functions. Therefore, it is always a good idea to hire a CA or tax consultant, as they will help you reduce your tax liabilities by utilizing more deductions and tax credits. Moreover, you will also be able to focus better on your business as if someone responsible is already seeing the taxes. 

4. Plan Investments 

Investments are also one of the great options for businesses to save their taxes. You can invest in various programs such as ELSS, PPF, tax-saver, FDs, etc. However, make sure to properly plan the investment amount and time duration to get the best possible outcomes. It will allow you to make more deductions and exemptions while filing your ITR.  

5. Claim All Possible Deductions

A growing business generally has more advantages than deductions. For instance, multiple deductions are available for growing companies or startups over their investments and business expenses. You can claim for deductions like home office deductions, charity or donation deductions, and much more. 

6. Leverage Net Operating Losses

Growing business refers to a face spike in the graph of losses and profits. In this way, you can even utilize the losses for your benefit and save your taxes with the help of them. In simple words, you can show the less official taxable income in your books in order to cover those previous losses. That’s how you can lower your tax liabilities by even utilizing the losses. 

7. Manage Cash Flows

Cash flow management is amongst the best tax planning tips for small businesses that are growing rapidly. You should timely fill your monthly and quarterly taxes, as it will allow you to complete your tax liabilities over the year and not face a load of excessive expenses at the end of the financial year. Moreover, the proper cash flow can also help you avoid excessive penalties and interests.

Also Read: How GST Has Helped Businesses To Reduce Their Tax Burden?

5 Effective Tax Planning Tips for Small Businesses that are Planning to Sell or Merge

When a business is going to sell, you have to take care of various factors to save a significant amount of your money. Here, we have mentioned some of the valuable tips to lower your tax liabilities before selling your business.

1. Maintain Good Financial Records 

If your business is going to be sold out or merged, then you have to end it after properly reconciling the records of your business revenue and expenses. The tax planning is done based on your company’s financial data. Therefore, properly marinating your financial records will help you better plan your taxes. You can even use tax planning software to evaluate your business records effectively. 

2. Keep Some Extra Funds for Managing Tax Liabilities 

Businesses generally need to pay the taxes several times a year. Thus, if your business is going to merge with another entity, then it is required for you to have some contingency tax funds. It will allow you to not scramble for the taxes at any time because you can pay them anytime needed. Business owners generally keep the 35% profit as their contingency funds for managing taxes. 

3. Try to Lower Your Adjusted Gross Income

Most taxes are generally dependent upon the Adjusted Gross Income (AGI) of the company. Now, when you’re planning to sell your business, you should try to lower your AGI to reduce your extra taxes over various expenses. To reduce your Adjusted Gross Income, you can invest in health saving plans or other investment options. It will effectively reduce your tax liabilities. 

4. Take Professional Guidance

The professional always helps in any condition to reduce your tax liabilities. You just have to give a small chunk of it to your tax advisor. They better know and understand the conditions when a business is about to sell or merge. Hence, they can better take advantage of those deductions and tax credits that you might not even be aware of. In this way, you can significantly reduce your tax liabilities. 

5. Document Your Transaction

While selling your business, you should maintain the transparent and compiled documentation of your business transfer. In fact, you have to maintain the proper records of the financial statements, contracts, agreements, and tax-relevant filing. It will allow you to plan your tax better and save the most possible out of it.

Also Read: Tax Implications For Small Businesses In Specific Industries

5 Tax Planning Tips for Small Businesses that are Planning to Retire

At the time of retirement, small businesses should work more strategically and practically. Because, it can allow you to leave with the most profits in hands. Here we’ve mentioned the tax planning tips for small businesses that are planning to retire: 

1. Create a Business Exit Plan

Small businesses that are planning to retire should have a comprehensive exit plan. You have to calculate your capital gains and tax concessions to make your business retirement as profitable as possible. It will allow you to save a lot of additional taxes and expenses if an exit is planned properly.   

2. Reassess Your Business Investments 

Businesses generally hold a lot of investments that allow them to increase their overall worth. Most of the investments are tax-exempted to a limited amount. Thus, you have to reassess all of your investments and give yourself a better retirement. 

3. Utilize Retirement Contributions and Bonuses 

Companies provide bonuses and retirement contributions to their employees that allow them to reduce their tax liabilities significantly. Here, you can hire a professional to properly handle the retirement contributions and keep your company in profit. Moreover, it will also satisfy the company’s employees, which will directly impact your revenue. 

4. Understand the Capital Gains 

Small business owners need to determine their tax liabilities. Tax rates easily vary with the time that can let you face different amounts of liabilities. Simply put, long-term capital gains are generally taxed at a lower rate in comparison to short-term gains. Therefore, if you properly utilize such tax planning tips for small businesses that are planning to retire, it will allow you to lower your tax liabilities significantly. 

5. Guidance From Tax Advisors or Fellow Business Retirees 

Lastly, the most effective one is that you should take guidance from tax advisors or fellow business retirees. They are more experienced than you in terms of tax planning. Therefore, it is amongst the best possible tips to reduce your tax liabilities and instead retire making a lot of profit.

Also Read: GST: Everything You Need To Know For Small Business

Wrap Up

Small businesses generally have more tax liabilities than others as they do not have the required resources to reduce them. It is not necessary to tell the importance of reducing taxes. Thus, we have mentioned the professional’s suggested tax planning tips for small businesses. We hope you properly apply these tips to your business and get the best possible outcomes.

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Prarabdh Gupta
Prarabdh Gupta is a finance content writer with 4+ Years of Industry experience in simplifying complex finance terms. He crafts captivating and engaging content around mutual funds, insurance, banking, real estate, taxation, and financial planning. He has completed his graduation from Jiwaji University, Gwalior.

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