Hi
Currently, I earn about 17L from software consulting for a British company. I have no major expenses, so I apply for presumptive taxation as a sole proprietorship. I have no GST.
One of my customers, other vendors and have some problems and the customer asked me if I can accept their job from the next financial year. I am able to run it myself by introducing an additional person to do a lite-backed job for 5l / year, and I'll do the rest. Therefore, my actual expenses will not exceed 10L / year even then.
The customer ok to sign the agreement and invoice from several entities.(Within reason)
How can you make this tax efficient?
My CA suggests that I make 40l billing in my own name and my parent name (40L) (both to use presumptive taxes). And the rest billing in a newly founded private limited company (4.6 CR), the company will not distribute dividends and simply save profits every year.
Is this the right way? My plan is to do this for 4-5 years and then retire and live on the stored money of my company. Can I continue to withdraw money from my own company even if it does not make any profits in the future?
Is a LLP advisable or better than a domestic company? Please advise you both in terms of tax efficiency and overall compliance overhead.
Many Thanks.
CAclubindia
