It is best to decide the business structure before starting of a business. Every business setup must deal with a challenge to identify the most beneficial business entity registration type.
There are several options but two of the most common considerations are Partnership Firm and Private limited company. Most of the Startup founders are in dilemma whether they should choose Partnership Firm or Private Limited Company.
This article discusses the tax provisions applicable for a Partnership Firm and a Private Limited Company with the registration process requirements.
A. Rate of Tax
1. PARTNERSHIP FIRM:
The rate applicable for a partnership firm is flat 30%.
Surcharge: 12% of tax where net income > Rs. 1 crore. (Subject to Marginal Relief)
Read more on: https://taxguru.in/income-tax/partnership-firm-private-limited-company-tax-comparison.html
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