tax planning
abdulrahaman
(Querist) 07 January 2010
This query is : Resolved
Dear sir ,
let me know the best tax planning for the following assesse.
1) The person is a doctor running a private clinic.In this condition which is the best method of tax planning mention below, if this person consists of wife (educated house wife),two minor chilren,father and mother.
a) A partnership firm of husband,wife,father and mother.
b) a private trust
c) any other tax planning
A V Vishal
(Expert) 08 January 2010
a) A partnership firm of husband,wife,father and mother.
Ans. Not advisable since the other partners are not professionals.
b) a private trust
Ans. It is a better options but it has its own share of pros & cons.
c) any other tax planning
Ans. Other options are available but only a detailed discussion can solve majority of your tax woes.
Vineet
(Expert) 08 January 2010
The least taxed entity is individual/HUF. You can have your HUF as owner of the clinic and you and your wife may be paid professional charges/ salary. Thus three entities are created for same source of income with their share of tax slabs and tax exempt income. further all the three entities can claim deduction u/s 80C.
Other method may be to form a company as owner of the clinic. You can become a paid director of the company earning salary and minimising tax incidence by availing various allowances. your wife can also become a paid employee. However, regulatory compliances are more in case of a company.
soumitra basu
(Expert) 09 January 2010
You can also form a partnership firm having all the family members. You can also take the minor children as partner. From the Profit of the Nursing Home, you can pay interest on capital and salary to all partners. You partnership deed should be suitable drafted. Though the income of the minor children shall be included with the parents, yet it is a debatable question whether salary from firm as working partner shall be included. If your parents are Senior Citizen, you can pay more salary to them to minimise the tax. If possible you can opt for the deemed profit as mentioned in section 44AD of the Act. You can also try other option.
Vineet
(Expert) 11 January 2010
Basu Ji,
The querist is a Doctor. How can he opt for deemed profits u/s 44AD which is applicable for businesses of civil construction etc.
secodly, Vishal has rightly pointed out that partnership firm in this case is not advisable as other members are not professionals.
