Educational Guides | Indian Finance & Taxes

Educational Guides

Your plain-English roadmap to Indian Finance & Taxes

TAX FUNDAMENTALS

Taxes in India can feel like a headache. Forms, portals, endless rules—it’s a lot. But you don’t need to be a finance expert to get it. Once you know the basics, it’s not that scary.

1. Income Tax: The Price of Earning

Income tax is basically a fee you pay to the government for earning money in India. It includes salary, business profit, rent, interest, and capital gains.

Old vs. New Regime:

Old Regime: Best for savers. Use "coupons" (deductions) like LIC, Rent, and Tuition fees to lower tax.
New Regime: Best for simplicity. Lower rates, but no "coupons."

Tip Don’t guess. Check both every year and pick the one that leaves more cash in your pocket.

2. GST: The Tax on Selling

GST is on what you sell. If your sales cross ₹20 lakh or ₹40 lakh a year, or if you sell online (Amazon/Zomato), you likely need to register.

3. TDS: Paying as You Go

TDS (Tax Deducted at Source) is the government taking small cuts throughout the year so you don't have a giant bill in March. Check your Form 26AS to see how much has been collected.

4. Filing Your ITR: Closing the Year

Filing is just the final math. You tell the tax department: "Here’s what I earned, here’s what I’ve paid, let’s settle up." Important: Always verify with an OTP to make it count!

BUSINESS TAX PLANNING

Handling taxes isn’t just about staying compliant; it’s about keeping more of your hard-earned revenue.

Picking Your "Label"

Structure	Best For	Key Benefit
Sole Proprietorship	Freelancers / Small Shops	Simplest & cheapest to run.
LLP	Service Agencies	Protects personal assets.
Private Limited	Startups seeking funding	Easy to raise investment.

Advance Tax & Audits

If your tax bill exceeds ₹10,000, you must pay in quarterly chunks. If your sales cross ₹1 Crore (Goods) or ₹50 Lakh (Services), you might need a CA-certified Tax Audit.

            Golden Rule: Even if you made a loss, file your return! This allows you to "Carry Forward" losses to save tax on future profits for up to 8 years.
        

STARTUP AND ENTREPRENEURSHIP

Building the next big thing? Don't let bad paperwork crash your flight.

The "Startup India" Badge

To get the perks, you must be a Pvt Ltd or LLP, under 10 years old, and be innovative. This unlocks Tax Holidays and exemptions from Angel Tax.

ESOPs & Cap Tables

ESOPs are a promise of ownership to employees. Keep your Cap Table (list of owners) clean from Day 1. Investors hate messy ownership records!

ACCOUNTING & FINANCIAL REPORTING

Profit is an opinion. Cash is a fact.

            The Big Three Reports
            P&L: Did we make money?
Cash Flow: Will the checks bounce?
Balance Sheet: What do we own vs. owe?

        

The "Cash Gap"

Working capital is the time between paying your supplier and getting paid by your customer. Your goal is to keep this gap as short as possible to avoid running out of cash.

PERSONAL FINANCE & WEALTH

Making money is hard; keeping it is an art.

Smart Wealth Tips:

Home Loans: Use the interest as a tax shield to lower your taxable income.
Mutual Funds: Equity held for >1 year has lower tax. Always calculate "after-tax" returns.
Real Estate: Reinvest your profit into a new house to legally avoid capital gains tax.
Insurance: Buy Term Insurance for protection, not for tax saving. Don't mix investment and insurance.