Tax Tips for Your Craft Business

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It is very essential for every craft business to file their tax properly within the due time otherwise it may bring them some inconvenience. However, the complex taxation low has brought more stringency to the craft business. As a craft business owner, you will always want to save your taxes so that you can maximize your profit. So, we have come up with various tips that help you to save your tax. Next time you calculate taxes for your craft business you will be surprised to see how much taxes that you had saved.  

The following are those essential tax saving tips for your craft business:

  • Claiming house loan benefits: House loan can be very beneficial for saving taxes. Since you can claim an interest as a deduction for your house loan under section 80 C, it can serve as a boon for many businesses. You can avail house loan for constructing your house or for its renovation and you can invest a few parts of it on your craft business which will help you to maximize your productivity and ultimately earn more revenue. At the same time, you can avail discounts from tax department as you have taken house loan and you get tax benefits under section 80 C as per the rule of the government.
  • Paying municipal tax online or by cheque: As per the law of taxation, you can claim the amount that you have paid as a municipal tax. Generally, people pay the municipal tax in cash and normally forget to keep the receipt safely. This is where they do the wrong because of ignorance. If you pay this tax by cheque or through online, you will have that record in your bank statement. You can easily collect that statement and file for the discount when filing the tax for your craft business.
  • Keeping a proper record of cash expense: In craft business, cash operation is very common. Labors generally like to get their wages in cash as they find difficulties in an online transaction. But as a craft business owner, you have to keep the record of your every cash transaction very properly and file those expense while filing the tax. Many times it is seen that proper cash receipt having the signature or thumb impression of labor is not maintained properly for which when the craft business owner claims for deduction it gets rejected from the tax department. So, it is very essential to keep every record of the cash transaction so that it can be claimed during the final tax filing.
  • Filing Income tax on time: Another essential thing that every new craft business owner should remember that it is possible to carry forward to the income and loss of business for a consecutive period of 8 years. Hence it is possible to set off against the income of next year for a particular business in case it is not set off against the income of the present year. But this benefit can be availed only by those companies who file their taxes on due time. Therefore, it is very essential for each and every company to file their income tax return on or before the stipulated time.      
  • Income from capital gains: It is generally seen that the craft business owners normally left out when they are asked about the capital gains. There can be two types of capital gains: long-term capital gains and short-term capital gains. Long-term capital gain is earned when you sell any of your assets after holding it for 36 months whereas short-term capital asset is earned when you sell your asset before 36 months of holding. When you will earn a short-term capital gain you will be taxed at a flat rate of 15 % whereas it is 20%in case of long-term capital gains. So, a proper knowledge of the tax structure of long-term capital gains and short-term capital gains can help you while filing the correct tax and save your extra tax.

So, all the above-mentioned tips are very vital and should be remembered carefully while filing the income tax to get maximized benefits and save your taxes.

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