Taxation for a family investment firm

Rohshan (MBA) (21 Points)

23 April 2024  

Inorder to reduce taxation on personal account due to FNO profits, I am planning to setup a private limited company for investment and trading purposes, wherein i will be primarily trading in FNO and cash segment. 

I & my father will be giving our personal money as loan to this PVT LTD entity and will start trading under company account. Both me and my father will be working as contractors in our PVT LTD firm. We plan to withdraw contractual remuneration & interest from the trading profits that we generate in the PVT ltd. 


company profits:: 2 crore

interest amount ( @ 12% on 2 cr capital) i.e  24 lakh

contractual remuneration Me & father 80 lakh each i.e arnd 1.6 cr

Total taxable for PVT LTD: 2 cr - 24 lk -1.6cr=  16Lakh 

Total corporate Tax @ 25% of 16 lakh = 4 Lakh

Taxable income  for me & father  (under 44ADA presumptive taxation)10% of 80 lakh= 8 lakh each

Is this structure legal? Are there any fundamental / legal flaws in we opt-in for this structure?