Page 181 - DCOM508_CORPORATE_TAX_PLANNING

Corporate Tax Planning Tanima Dutta, Lovely Professional University

Notes Unit 8: Tax Planning for Different Organisations

CONTENTS

Objectives
Introduction
8.1 Decision Regarding Forms of Organisations
8.1.1 Forms of Business Organisations
8.1.2 Factors Involved in Selection of Organisation
8.2 Tax Planning for Sole Proprietorship
8.2.1 Tax Aspects of a Proprietorship
8.2.2 Advantages of Sole Proprietorship
8.2.3 Disadvantages of Sole Proprietorship
8.3 Tax Planning for Partnership
8.3.1 Position of Firm under the Income Tax Act
8.3.2 Provisions Relating to Taxation of Partnership Firms
8.3.3 Income Tax Rates for Partnership Firm A.Y. 2012-13, 2011-12, 2010-11 and
2009-10
8.3.4 Advantages of a Partnership
8.3.5 Disadvantages of a Partnership
8.4 Tax Planning for Company
8.5 Summary
8.6 Keywords
8.7 Review Questions

8.8 Further Readings

Objectives

After studying this unit, you will be able to:
Discuss the decision regarding forms of organisations

Describe tax planning for sole proprietorship
Explain tax planning for partnership
Elucidate tax planning for company

Introduction

Talking about organisation forms, the enterprise types include individual proprietorship
enterprise, partnership enterprise and limited corporation which can be divided into limited
liability company and joint stock limited partnership. The tax system regulates different tax
burden levels for the enterprises with different organisation forms, so the establishment costs
and advantages of different organisation forms are different. The tax is one of factors we should
consider when we select the organisation form of the enterprise. Especially when the organisation

form of the enterprise has large influence to the production and management, the tax will be the

176 LOVELY PROFESSIONAL UNIVERSITY