ITR Filing for Moms Running Home-Based Businesses
As a mom running a home-based business, you know that managing your finances can be a challenge. From keeping track of expenses to filing your income tax return (ITR), it’s essential to stay organized and compliant with tax laws. In this comprehensive guide, we will explore the tax implications for moms running home-based businesses, including the tax rates, deductions, and exemptions available to them.
Tax Rates and Annual Income Slabs
The income tax rates and annual income slabs for moms running home-based businesses are the same as those for salaried employees. Income up to ₹2.5 lakhs is not taxed, while income between ₹2.5 lakhs and ₹5 lakhs is taxed at 10%, and income above ₹5 lakhs is taxed at 20%. For the new tax regime, the tax rates are 10% for income between ₹2.5 lakhs and ₹5 lakhs, 15% for income between ₹5 lakhs and ₹7.5 lakhs, and 20% for income above ₹7.5 lakhs.
How to Pay Advance Tax
Moms running home-based businesses are required to pay advance tax on a quarterly basis. The due dates for advance tax payments are:
- 15th September: 30% of the total tax payable
- 15th December: 60% of the total tax payable
- 15th March: 100% of the total tax payable
How to Claim Deductions
Moms running home-based businesses can claim various deductions and exemptions to reduce their tax liability. Some of the key deductions available to them include:
- Section 80C: Investments in instruments like Public Provident Fund (PPF), National Savings Certificate (NSC), and Equity-Linked Savings Scheme (ELSS) can qualify for deductions up to ₹1.5 lakhs.
- Section 80D: Premiums paid for health insurance policies for yourself, your spouse, and dependent children can be claimed as deductions up to ₹50,000.
- Section 80G: Donations made to eligible charitable organizations can be claimed as deductions, subject to certain limits.
- Section 80CCD: Contributions made to the National Pension System (NPS) can be claimed as deductions up to ₹1.5 lakhs.
How to File ITR
Moms running home-based businesses must file their ITR by July 31st of the assessment year. They can file their ITR using the ITR-1 form, which includes details of their income, deductions, and credits.
Importance of Accurate Record-Keeping
Accurate record-keeping is crucial for moms running home-based businesses to ensure compliance with tax laws and to claim the correct deductions and exemptions. It is essential to maintain detailed records of all income and expenses, including receipts, invoices, and bank statements.
Conclusion
As a mom running a home-based business, you have tax obligations to fulfill, but you can also take advantage of various deductions and exemptions to reduce your tax liability. By understanding the tax rates, deductions, and exemptions available to you, and maintaining accurate records, you can ensure compliance with tax laws and maximize your tax savings.
Photo by Katie Harp on Unsplash (Free for commercial use)
Image Published on April 2, 2021
