solepropritership n ltd company

This query is : Resolved

saurabh nawal (Querist)
Follow

01 April 2009 dear all........

if i have 5 sole. units on the name of my family members.....and i am earning a profit of 10 lacs per annum per unit.....
so,
now suggest me whether it is better to unite them in a ltd company or not.......
will it beneficial from the tax point of view........
tell me the advantages of both......

HUZAIFA HUSSAIN

HUZAIFA HUSSAIN (Expert)
Follow

01 April 2009 I personally feel keeping the five individual entities are better than a limited company for the following reasons.

1. u r getting basic exemption under income tax act in all the five files

2. Compliance level are more in case of Ltd Company as compared to sole prop.

3. Tax can be planned in individual case by making savings under sec.80C

4. Co.'s are chargeable to tax from very 1st rupee of pofits.