Manage Profit for tax saving

This query is : Resolved

Janardan (Querist)
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24 December 2010 I am working in pvt ltd. co. our co. get profit last yr. near about 1 cr. and paid tax theiron near about 30 lac. Will you give me some tips for tax saving to pvt. ltd. company e.g. paid divident to director, creation of reserve fund or investment plan ?

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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24 December 2010 Both the method will not save the tax. You have to make some loss like share trading loss etc.

Janardan

Janardan (Querist)
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24 December 2010 if co paid to divident to the shareholder i.e. director of the company than income of divident is exempt for director and divident amount dibited to p&l, so our net profit will be comes down. it it right? if yes than tell me procedure for payment of divident.

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Rasesh

Rasesh (Expert)
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24 December 2010 No. There will be no impact on the Company's tax liability.

In fact the company will also have to pay dividend distribution tax on the dividend at 18%.

The director will benefit as he will get dividend tax free.

To the company, it makes no difference