Smart Tax planning is imperative to businesses

Optimize Tax Liabilities with Strategic Investments

As the new financial year begins, Indian small and medium-sized enterprises reflect on the past year’s financial decisions and explore strategies to optimise their tax liabilities and improve overall financial health. And, it is imperative to take immediate actions to ensure compliance and maximize benefits. Some of the tax saving initiatives that can help businesses can refer to maximise their benefits are:

• Invest in Capital Assets: Acquiring machinery, equipment, technology, warehouse or property before the fiscal year-ends can be advantageous. These capital expenditures will help you reduce your profits leading to lesser tax outflow. Some of these assets are also eligible for depreciation deductions, providing tax benefits over period of time.
• Contribute to Employee Welfare Schemes: Payments made towards employee welfare, such as contributions to provident funds, pensions, insurances or other employee benefits are deductible expenses. Contributions towards retirement plans on behalf of employees help you better tax planning. Ensuring these contributions are made before the end of March can aid in reducing your taxable income while also benefiting your employees.
• Optimize Inventory: A better inventory management helps you to reduce the probable write-offs thus saving the taxable income. Businesses must review their inventories, write off dead or slow- moving stocks that will help you to claim tax deductions on the losses booked.
• Review and Settle Outstanding Expenses: Clear any outstanding business expenses before the financial year concludes. Expenses like rent, utilities and professional fees are deductible when paid within the fiscal year, contributing to lower tax liability.
• Planning on Tax Credits: Every industry is governed by various tax incentives, business must review if they are qualifying for any such incentives or tax -credits. Research & Development (R&D) tax credits, renewable energy tax credits, Employment generation tax credits (Apprenticeship) are some of the known tax credits that businesses can take advantage of.
• Marketing Expenses: Marketing is an essential tool for business growth. Though marketing has many elements, for SMBs, Digital marketing has become extremely simple and easy to adopt. 

At IndiaMART, we understand the diverse needs of businesses across various industries and scales, and offer one stop solution for visibility, business leads, creating new reach & markets and connect with existing and potential buyers. By leveraging IndiaMART’s services, businesses can allocate their marketing budget round the year, ensuring strategic investment and better tax planning. It is important for businesses to have a proper tax consultant who can guide them the customized solutions, taking full advantage of applicable tax credits and deductions, yet be fully compliant. Implementing these strategies, as applicable can lead to substantial tax savings and position your business favorably for the upcoming financial year.