Company Law, Taxation Policy for companies.

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pankaj (Querist)
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19 January 2008 Could anyone of the experts recommend a good book or books that could answer the following questions :

Basically about formation of company, Tax structures and how to best manage the revenues towards expansion and reaching least taxable income. I'm looking towards gaining information about all this as of now.

1. An overview on what is the Tax structure for a private limited and a public limited software company?

2. Public companies distribute dividend, what does a private limited company distribute to its owners? Are these both Tax exempt?

3. Can a US Based private limited company held by NRI buy property in India to expand its business? or can it only rent property ?

4. For a Indian private limited company, if the company owner wants to expand business and decides to buy another piece of Land/office in India then can he do so from the Revenue earned in that year and can this purchase be considered as an expense and thus lead to reducing the taxable profit?

5. Question 4 same in regards to public limited company?

Any suggestions are really appreciated. Thank you for your time and effort.

Regards
Pankaj

R.V.RAO

R.V.RAO (Expert)
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19 January 2008 ABOUT FORMATION OF A COMPANY PL. REFER
A.RAMAYYA'S GUIDE TO COMPANY LAW.
OR M.C.BHANDARI'S COMPANY LAW PROCEDURES 3 VOLUMES WILL ALSO BE OF MUCH USE.
TAXMANN'S CORPORATE AND ALLIED LAWS WILL ALSO BE AN USEFUL REFERENCE BOOK.
ON TAXATION, THERE ARE MANY AUTHORS LIKE SRI R.N. LAKHOTIA OR TAXMANN'S INCOME TAX ACT ,RULES ETC...
LATEST 2008-2009 INCOMETAX READY RECKONER WILL ALSO THROW LIGHT ON LATEST AMENDS TO IT. LAW .YOU ALSO FIND INFORMATION ON TAX RATES APPLCABLE TO DIFFERENT COMPANIES THERE.
DIDIDEND DECLARED BY PUBLIC LIT. OR PRIVATE LTD. COMPANIES BOTH ARE EXEMT FROM TAX IN THE HANDS OF THE RECEIVER.
ONLY THE COMPANY DECLARING THE DIVIDEND WILL BE LIABLE TO PAY DIVIDEND DISTRIBUTION TAX.
US BASED PVT. LTD. COMPANY HELD BY AN NRI BUYING PROPERTY IN INDIA.FOR RESTRICTIONS AND DETAILED PROCEDURES AND EVEN HELPING IN DOCUMENTATION AND COMPLYING STATUTORY FORMALITIES LIKE RBI APPROVAL WHERE APPLICABLE ,PL. VIST
www.nritaxservices.com
www.labnol.org
www.taxworry.com
www.iic.nic.in(FAQ ON NRI)
WHEN WE PLOUGH BACK PROFITS OR INTERNAL ACCRUALS OF EXISTING BUSINESS TO EXPAND INTO NEW BUSINESS, IT IS ALLOWABLE.AS THE NEW DIVISION IS PART OF EXISTING BUSINESS,YOU NEED TO CAPITALISE THE EXPENDITURE AND CLAIM DEPRECIATION AFTER COMMENCEMENT OF NEW BUSINESS.PRELIMINARY EXP. ON FORMATION OF THE NEW DIVISION MAY ALSO BE CLAIMED FOR WRITE OFF OVER A NUMBER OF YEARS, WHILE PREOPERATIVE EXP. WILL BE CAPITALISED ALONG WITH ASSETS OF THE NEW DIVISION (WHICH IS A PART OF THE EXISTING BUSINESS)AND DEP. CLAIMED .
80IA BENEFITS WHERE APPLICABLE MAY ALSO BE CLAIMED.
R.V.RAO

pankaj

pankaj (Querist)
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19 January 2008 Mr. Rao,

Thank you for the detailed response and the complete information you've provided.

This is highly appreciated.

Regards
Pankaj

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