Buying a car under and taxes under 44AD or 44ADA?

Good morning,

I provide service as a network consultant for a US company.
It is only a service I am offering and no goods are involved. Billing is monthly.
I receive the payment into my savings bank account. Annual income would be around 30Lakhs.
I have registered for GST on my personal PAN and got the Letter of Undertaking for filing GST without tax. I file the GST returns with 0 tax every month.
I file persoanl IT returns under 44ADA.


I am planning to buy a car and I do not want to have the vehicle under my name. So I thought of the following.

Start/Register a firm.
Get a PAN, GST number and current account.(The income from US would be deposited into this current account.)
Buy the car under the company name.

I have the following questions:

Is the solution I am thinking correct?
What type of firm should I start? Can I be the only owner or there has to be partners?
How should I take my amount/share/salary from the firm?
Do I have to maintain books for the firm?
Do I have to file the IT returns under the firm? Which section to be used 44AD or 44ADA?
Do I have to file the IT returns personally? Which section to be used 44AD or 44ADA?
Do I have to file GST returns for both the firm and personal?


Thanks

 

Replies (2)
Quick Summary
This discussion explores the feasibility of setting up a firm to purchase a car, aiming to leverage tax benefits under sections 44AD or 44ADA. The user, a network consultant earning around 30 lakhs annually, seeks to register a firm to own the vehicle and manage income. Advice covers firm types (Sole Proprietorship or Private Limited Company), ownership structures, remuneration, book-keeping, and filing requirements for both firm and personal IT and GST returns.

 

1. Solution: Mostly correct. Registering a firm can help you achieve your goal, but consider the added compliance and tax implications. 

2. Firm type: You can register a Sole Proprietorship (SP) or a Private Limited Company (PLC). SP is simpler, but PLC offers more benefits and protection. 

3. Ownership: For SP, you can be the sole owner. For PLC, you need at least two directors, but you can have a nominee director. 

4. Remuneration: Draw a salary or dividends from the firm. Ensure you follow the relevant tax rules.

 5. Book maintenance: Yes, maintain proper books for the firm.

6. IT returns: File IT returns for the firm (44AD or 44ADA) and personally (44ADA).

 7. GST returns: File GST returns for both the firm and personally (if applicable).

Additional considerations: - Consult a chartered accountant or lawyer to ensure proper registration and compliance. -

 Consider the tax implications of transferring income from your personal account to the firm's account.

- Keep personal and business transactions separate. - Review the tax benefits and liabilities of registering a firm. 

Pls arrange you can easily arrange itfiling

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