Tax Savings Under LLP
Content
Tax Savings under LLP STRUCTURE as compared with SOLE PROPRIETORSHIP (When the Annual Net Profit is upto Rs. 25 Lac)
Rs. 1,19,000 Savings
SOLE PROPRIETORSHIP FIRM
Income Slabs Total Tax outlay from Proprietor Net Profit Slabs
LIMITED LIABILITY PARTNERSHIP (LLP)
Taxation Slabs 10 % Taxed in the hands of LLP Rs. 3 Lac 31% on Rs. 30,000 = Rs. 2,70,000 is distributed among the Partners If equal distribution among Partners: Rs. 1.35 Lac each 40 % Taxed in the hands of LLP Rs. 22 Lac 60 % Distributed to Partners as Remuneration 31% on Rs. 8,80,000 = Rs. 13,20,000 is distributed among the Partners= Rs. 6,60,000 each Hence total remuneration paid to each Partner is Rs. 7,95,000 (1.35 lac+ 660K) Each Partner to pay tax on Rs. 7,95,000 -Upto Rs. 1.9 lac = Nil -On 3.1 lac = Rs. 31,000 - On 2.95 lac = Rs. 59,000 Rs. 2,72,800 Total Tax outlay from the LLP & Partners Rs. 9,200
Upto- Rs. 1,90,000
Nil Rs. 31,000 (10% on Rs. 3.1 lac) Rs. 1,00,000 (20% on Rs. 5 lac) Rs. 4,50,000 (30% on Rs. 15 lac)
90 % Distributed to Partners as Remuneration
Rs. 1.9 Lac to 5 Lac
Rs. 5 Lac to Rs. 10 Lac
Rs. 10 Lac to Rs. 25 Lac
Rs. 1,80,000
(Rs. 90,000 each)
Rs. 5,81,000
Rs. 4,62,000
(If one of the partner is Female/Senior citizen tax will be less than Rs. 4,40,000
TOTAL SAVING UNDER THE LLP MODEL IS Rs. 1,19,000/Rs. 1,41,000
(Rs. 5,81,000 – Rs. 4,62,000= Rs. 1,19,000)
Tax Savings under LLP STRUCTURE as compared with PRIVATE/PUBLIC LIMITED COMPANY (When the Annual Net Profit is upto Rs. 25 Lac)
Rs. 6,24,000 Savings
PRIVATE LIMITED COMPANY
Net Profit Income Tax = Total Tax outlay from Company Rs.8,25,000 (33% on Rs. 25 Lac) (Net Profit available for distribution as Dividend= Rs. 16.75 Lac) 40 % Taxed in the hands of LLP Rs. 22 Lac 60 % Distributed to Partners as Remuneration Dividend Distribution = Tax 2,68,000 (16% on Rs. 16.75 Lac) Rs. 3 Lac Net Profit Slabs
LIMITED LIABILITY PARTNERSHIP (LLP)
Taxation Slabs 10 % Taxed in the hands of LLP 90 % Distributed to Partners as Remuneration 31% on Rs. 30,000 = Rs. 2,70,000 is distributed among the Partners If equal distribution among Partners: Rs. 1.35 Lac each 31% on Rs. 8,80,000 = Rs. 13,20,000 is distributed among the Partners= Rs. 6,60,000 each Hence total remuneration paid to each Partner is Rs. 7,95,000 (1.35 lac+ 660K) Each Partner to pay tax on Rs. 7,95,000 -Upto Rs. 1.6 lac = Nil -On 3.4 lac = Rs. 34 k - On 2.95 lac = Rs. 59 k Rs. 2,72,800 Total Tax outlay from the LLP & Partners Rs. 9,300
Rs. 1,86,000
(Rs. 93,000 each)
Rs. 10,93,000
Rs. 4,68,000
(If one of the partner is Female/Senior citizen tax will be less than Rs. 4,60,000
TOTAL SAVING UNDER THE LLP MODEL IS Rs. 6,24,000/Rs. 6,40,000
(Rs. 10,93,000 – Rs. 4,68,000= Rs. 6,24,000)
Empowering En trepreneurship...
TM
PUNE BANGALORE MUMBAI CHENNAI
Tel : +91 20 6729 6500 / 6400 5120 Email : [email protected] Website : www.bmcgroup.in
An ISO 9001 : 2008 Company
Copyright © 2011-12 - All rights reserved BMC Consultancy Services Pvt. Ltd.
Rs. 1,19,000 Savings
SOLE PROPRIETORSHIP FIRM
Income Slabs Total Tax outlay from Proprietor Net Profit Slabs
LIMITED LIABILITY PARTNERSHIP (LLP)
Taxation Slabs 10 % Taxed in the hands of LLP Rs. 3 Lac 31% on Rs. 30,000 = Rs. 2,70,000 is distributed among the Partners If equal distribution among Partners: Rs. 1.35 Lac each 40 % Taxed in the hands of LLP Rs. 22 Lac 60 % Distributed to Partners as Remuneration 31% on Rs. 8,80,000 = Rs. 13,20,000 is distributed among the Partners= Rs. 6,60,000 each Hence total remuneration paid to each Partner is Rs. 7,95,000 (1.35 lac+ 660K) Each Partner to pay tax on Rs. 7,95,000 -Upto Rs. 1.9 lac = Nil -On 3.1 lac = Rs. 31,000 - On 2.95 lac = Rs. 59,000 Rs. 2,72,800 Total Tax outlay from the LLP & Partners Rs. 9,200
Upto- Rs. 1,90,000
Nil Rs. 31,000 (10% on Rs. 3.1 lac) Rs. 1,00,000 (20% on Rs. 5 lac) Rs. 4,50,000 (30% on Rs. 15 lac)
90 % Distributed to Partners as Remuneration
Rs. 1.9 Lac to 5 Lac
Rs. 5 Lac to Rs. 10 Lac
Rs. 10 Lac to Rs. 25 Lac
Rs. 1,80,000
(Rs. 90,000 each)
Rs. 5,81,000
Rs. 4,62,000
(If one of the partner is Female/Senior citizen tax will be less than Rs. 4,40,000
TOTAL SAVING UNDER THE LLP MODEL IS Rs. 1,19,000/Rs. 1,41,000
(Rs. 5,81,000 – Rs. 4,62,000= Rs. 1,19,000)
Tax Savings under LLP STRUCTURE as compared with PRIVATE/PUBLIC LIMITED COMPANY (When the Annual Net Profit is upto Rs. 25 Lac)
Rs. 6,24,000 Savings
PRIVATE LIMITED COMPANY
Net Profit Income Tax = Total Tax outlay from Company Rs.8,25,000 (33% on Rs. 25 Lac) (Net Profit available for distribution as Dividend= Rs. 16.75 Lac) 40 % Taxed in the hands of LLP Rs. 22 Lac 60 % Distributed to Partners as Remuneration Dividend Distribution = Tax 2,68,000 (16% on Rs. 16.75 Lac) Rs. 3 Lac Net Profit Slabs
LIMITED LIABILITY PARTNERSHIP (LLP)
Taxation Slabs 10 % Taxed in the hands of LLP 90 % Distributed to Partners as Remuneration 31% on Rs. 30,000 = Rs. 2,70,000 is distributed among the Partners If equal distribution among Partners: Rs. 1.35 Lac each 31% on Rs. 8,80,000 = Rs. 13,20,000 is distributed among the Partners= Rs. 6,60,000 each Hence total remuneration paid to each Partner is Rs. 7,95,000 (1.35 lac+ 660K) Each Partner to pay tax on Rs. 7,95,000 -Upto Rs. 1.6 lac = Nil -On 3.4 lac = Rs. 34 k - On 2.95 lac = Rs. 59 k Rs. 2,72,800 Total Tax outlay from the LLP & Partners Rs. 9,300
Rs. 1,86,000
(Rs. 93,000 each)
Rs. 10,93,000
Rs. 4,68,000
(If one of the partner is Female/Senior citizen tax will be less than Rs. 4,60,000
TOTAL SAVING UNDER THE LLP MODEL IS Rs. 6,24,000/Rs. 6,40,000
(Rs. 10,93,000 – Rs. 4,68,000= Rs. 6,24,000)
Empowering En trepreneurship...
TM
PUNE BANGALORE MUMBAI CHENNAI
Tel : +91 20 6729 6500 / 6400 5120 Email : [email protected] Website : www.bmcgroup.in
An ISO 9001 : 2008 Company
Copyright © 2011-12 - All rights reserved BMC Consultancy Services Pvt. Ltd.
