06 April 2021
Dear Sir, My relative is doing Trading business for branded furniture & has manufacturing hub for local manufacturing also. I have some query as follows: 1. From time to time business requires new machinery for capital expenditure purpose.No depreciation benefit allowable as per Tax Computation filed by the CA. 2.Business has CC & OD limit in Bank. Interest charged by the Bank is showing as expenses in books of account whether it is right or not? 3.Business also has Motor vehicles like Car & Two wheeler. If Business want to purchase through financier the above motor vehicle whether interest charged by the Bank will be booked in Business or not? 4. Now a days Govt has introduced new start company with maximum benefit in Tax etc. Please answer whether Proprietorship can go for avail this or not? 5. Whether Udyog Aadhar will be benefited to business if I will apply for this & what are the benefits. 6. Also give me comparison chart between Proprietorship Business Vs LLP/OPC with merit & demerit with less paper work.
Also let me know whether propertioship firm can introduced capital from time to time for business expansion of his own source / relative / friend etc. What is the capping for this, Is there any condition or limitation linked with Turnover etc.
What is the drawing limit for the proprietorship firm with capping if any.Can proprietorship firm use business money towards Tax Savings purpose & other purpose.
07 April 2021
1) Depreciation on capex related to business is an allowable deduction 2) Interest on CC/OD is an allowable deduction 3) Interest on loan on vehicles used for business is also an allowable deduction 4) Proprietorship concerns are not considered as startups. For details: https://cleartax.in/s/7-steps-to-register-your-startup-in-startup-india 5) Several benefits in case of udyog aadhaar: https://www.charteredclub.com/udyog-aadhar/ 6) Comparison: https://vakilsearch.com/advice/pvt-ltd-co-vs-llp-vs-opc/ 7) Proprietor can infuse capital as and when needed, no restriction as such 8) No restriction on withdrawal by the proprietor. Business money can be used for tax savings in order to claim deduction under chapter VIA 9) Money withdrawn for personal use will be treated as withdrawal from capital account.
Note: I've not completely read the data from above links. I've just provided the links to enable ease of reading.
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