Tax Planning is Not Tax Evasion — It's Good Finance

Effective tax planning is the legitimate structuring of transactions to take advantage of deductions, exemptions, and timing benefits that Parliament has expressly made available. For startups, several important provisions exist that are routinely underutilised.

Direct Tax — Corporate Tax Planning

  • Section 80-IAC: 100% tax holiday for eligible startups for three consecutive years out of ten
  • Section 35(2AB): Weighted 150% deduction for in-house R&D expenditure
  • IP holding structure: Efficient structuring of IP ownership for royalty income taxation
  • Loss set-off planning: Ensuring business losses are correctly carried forward and utilised

Section 80-IAC alone can save eligible startups crores in corporate tax. Professional guidance on the eligibility assessment is essential.

Goods and Services Tax

GST compliance for tech companies carries several nuances — particularly around SaaS and digital services, export of services (zero-rated), input tax credit on cloud infrastructure, and the place of supply rules for B2B vs B2C transactions.

Transfer Pricing

Any Indian company with foreign shareholders holding 26%+ equity, or with overseas subsidiaries, must comply with transfer pricing regulations. We prepare transfer pricing documentation, determine arm's length pricing, and file Form 3CEB with the tax audit report.