Author name: Yuvraj Vihol

Section 80-IAC of the Income Tax Act, 1961 is a startup-friendly provision aimed at encouraging entrepreneurship and innovation in India. It offers a 100% income tax deduction on profits for eligible startups, giving them room to grow without the burden of tax in their early years. What is Section 80-IAC? Eligible startups can claim a 100% tax deduction on profits for any 3 consecutive assessment years out of the first 10 years from the year of incorporation. This helps startups reinvest profits into business growth instead of paying taxes during the initial, crucial years. Who Is Eligible Under Section 80-IAC? To claim this deduction, the startup must meet the following conditions: Alternatively, it should be a scalable business model with high potential for employment generation or wealth creation. How to Claim the 80-IAC Deduction To avail of the tax benefit under Section 80-IAC, follow these steps: 👉 Pro Tip: Startups often delay applying until they begin making profits. Choose your 3-year claim period wisely! Certain businesses are not eligible for 80-IAC Deduction Additional Points to Note Summary Criteria Requirement Applicable to Private Limited Companies & LLPs Incorporation Window Between April 1, 2016 and March 31, 2025 Turnover Limit Up to ₹100 crore in any financial year Tax Benefit 100% deduction on profits for 3 years Recognition Required Yes – From DPIIT Claim Period Any 3 consecutive years out of first 10 years Conclusion Section 80-IAC is a powerful incentive for early-stage startups to scale faster without the burden of income tax. If you’re a founder, make sure you check your eligibility and apply for DPIIT recognition to make the most of this benefit FAQs

Section 10(14) of the Income Tax Act helps people save money by excluding certain allowances from their taxable income. This means, if your employer gives you extra money for specific work-related reasons (like rent or travel), you don’t have to pay tax on that amount! Let’s break it down in simple terms. Tax-Free Allowances Under Section 10(14) Income Tax In simple words, Section 10(14) says that some allowances (extra money) your employer gives you are not taxed if they are meant for specific work purposes. This means you don’t have to pay tax on that money, which helps you save! What Are These Allowances? Here are some common work-related allowances that are tax-free under Section 10(14): House Rent Allowance (HRA): 🏠 If you live in a rented house, your employer may give you HRA to help pay your rent. Under Section 10(14), you can exclude this amount from your taxable income (which means you don’t pay tax on it!). Travel Allowance: 🚗✈ If you need to travel for work, your employer may give you money to cover the travel costs. The money you use for work-related travel is tax-free! Conveyance Allowance: 🚆🚶‍♂ This is money your employer gives you to help you get to and from work. If you use this money for travel to work, it won’t be taxed. Special Allowances for Hard Jobs: ⚒ If you work in difficult or remote areas, your employer may give you extra money. These allowances are tax-free as long as you meet the conditions. Uniform Allowance: 👚👖 If you need to wear a uniform for work and your employer gives you money to buy or clean it, this money is tax-free! Other Work-Related Allowances: 💼 If your employer gives you money for things like overtime, lunch, or other work expenses, you may be able to exclude these from your taxes if they’re used for work-related purposes. Why Is This Important? 💡 Section 10(14) helps you save money on taxes by not taxing certain allowances that are meant to cover your work expenses. This means more of your salary stays with you, which is great, right? For example if your employer gives you ₹10,000 for travel expenses, and you actually use ₹8,000 for work-related travel, you won’t have to pay tax on that ₹8,000! The ₹2,000 that you don’t use may be taxed, though. How Do You Get This Benefit? To get the tax-free benefit under Section 10(14), you need to meet a few simple conditions: Things to Keep in Mind ⚠ Limits on Allowances: 💡 Some allowances, like HRA, have limits on how much you can claim. For example, if you get ₹15,000 HRA, but only ₹10,000 meets the conditions, you can only exclude ₹10,000 from your taxes. Proof and Records: 🧾 Make sure to keep records of how you use these allowances (like rent receipts, travel tickets, etc.). You might need them when filing taxes. Only Specific Allowances: ✅ Not all allowances are tax-free. Only specific work-related ones qualify under Section 10(14). For example, if you get a random allowance not related to work, it will be taxed. Conclusion Section 10(14) is great because it helps you save taxes on certain work-related allowances like HRA, travel allowance, and more. It makes sure you don’t pay tax on money that’s meant to cover your work expenses, so you can keep more of your salary in your pocket! 💸 Just remember, the money must be used for work, and you might need to show proof of how you spent it. So, make sure to keep your receipts and documents safe!

A Simple Explanation In India, the government wants people to save money for their future, so they created Section 80C in the Income Tax Act. This section allows you to save on taxes when you invest in certain saving plans or make certain payments. It helps you pay less tax if you save and invest your money in specific ways. How Does Section 80C Help You Save Taxes? Section 80C lets you reduce your total income by the amount you invest in certain saving plans. When your income goes down, the amount of tax you have to pay also goes down. For example If your yearly income is ₹10 lakh, but you invest ₹1.5 lakh in a saving scheme under Section 80C, your taxable income will become ₹8.5 lakh. This means you’ll pay tax on ₹8.5 lakh instead of ₹10 lakh, which reduces your tax bill. Tax saving under Section 80C The most you can save in taxes under Section 80C is ₹1.5 lakh in a year. This is the limit for claiming deductions. If you invest more than ₹1.5 lakh, you won’t get any extra tax benefits beyond that. Which Investments Qualify for Section 80C? There are different ways you can save money that will allow you to reduce your taxes. Here are some common options: Employee Provident Fund (EPF) If you work for a company, part of your salary goes into this fund. This money is eligible for tax savings under Section 80C. Public Provident Fund (PPF) This is a government-backed savings plan with a fixed interest rate. It’s a long-term investment and eligible for tax deductions. National Savings Certificate (NSC) A government scheme where you invest money for a fixed period and earn interest. This investment is eligible for tax savings. Life Insurance Premiums If you pay for life insurance for yourself, your spouse, or your children, the premiums are eligible for tax deductions. Tax Saving Fixed Deposit (FD) You can invest in a 5-year fixed deposit, which qualifies for tax savings under Section 80C. Sukanya Samriddhi Yojana (SSY) This is a savings plan for the girl child. Any contributions to this account are eligible for tax deductions. National Pension Scheme (NPS) This scheme helps you save for retirement. Money you put into this is eligible for tax saving. Senior Citizens Savings Scheme (SCSS) A scheme designed for senior citizens. Money invested here is also eligible for tax saving under Section 80C. 5-Year Post Office Time Deposit A savings plan offered by India Post. If you invest in it for 5 years, you can claim tax benefits under Section 80C. Principal Repayment on Home Loan If you’re paying back the principal part of your home loan, that amount can be deducted from your income under Section 80C. Why is Section 80C Important? The main benefit of Section 80C is that it helps you pay less tax by reducing your taxable income. If you are in a higher tax bracket, this can save you a lot of money. For example If your taxable income is ₹10 lakh, and you invest ₹1.5 lakh in a PPF or life insurance, you will pay taxes on ₹8.5 lakh instead of ₹10 lakh. This helps you save money on your taxes. Things to Remember About Section 80C Maximum Limit of ₹1.5 Lakh You can only claim a deduction of ₹1.5 lakh in a year. So, if you invest more than this amount, you won’t get any extra tax benefits. Lock-in Period Some of the investments, like PPF or tax-saving FDs, have a lock-in period. This means you can’t take your money out before a certain time. Multiple Investments You can invest in more than one scheme under Section 80C, like PPF, NSC, and life insurance premiums, as long as the total investment doesn’t exceed ₹1.5 lakh. Keep Proof of Your Investments When filing your tax returns, make sure to keep all the documents and receipts for the investments you are claiming under Section 80C. This could be receipts for insurance premiums, PPF deposits, etc. Conclusion Section 80C is a great way for people to save on taxes while also investing for their future. By putting your money in government-backed schemes like PPF, NSC, or paying for life insurance, you can reduce your tax burden. Not only will you be able to save on taxes, but you’ll also be building a financial cushion for your future, whether it’s for your retirement, children’s education, or buying a home. Make sure to use Section 80C to your advantage and save taxes while securing your financial future!

There is a Misconception that GST is paid on the Selling price of the goods and services. Though this fact is true for all the end-recipients of goods or/and services. For a ‘GST registered person’, the story is entirely different. Since, all the GST registered Persons can avail Input tax credit (ITC), because of which the GST payable by them largely boils down to the ‘profit’ or ‘mark-up’ component of the goods or/and services. Fundamental concept of Input Tax Credit Input Tax Credit (ITC) is a mechanism under the GST system that allows businesses to offset the tax they pay on purchases (inputs) against the tax they collect on sales (outputs). This ensures that GST is ultimately charged only on the value added at each stage of the supply chain. How ITC Works Let us understand with this the example, here – Mr. Vendor sets up his stall and prices the goods at ₹100. He charges 18% GST on this amount, making the total ₹118 for Mr. Chotu, who is purchasing the goods to resell. Because Mr. Chotu is registered under GST, the ₹18 he pays in tax to Mr. Vendor becomes his Input Tax Credit (ITC). Next, Mr. Chotu adds a ₹50 profit margin to the original base of ₹100, raising the new base price to ₹150. He then charges 18% GST (i.e., ₹27) on this ₹150 when selling to Mr. Ganjalal, the final consumer, bringing the total to ₹177. Since Mr. Chotu already paid ₹18 in GST to Mr. Vendor and claimed it as ITC, his net tax liability to the government is only ₹9 (₹27 collected minus ₹18 of ITC). Mr. Ganjalal, who is not registered for GST, must bear the full ₹27 tax as part of his final purchase cost, illustrating how ITC ensures that only the value added at each stage is taxed and that the ultimate tax burden rests with the end consumer. Particulars Mr. Vendor Mr. Chotu Mr. Ganjalal Base Price ₹ 100 ₹100 (bought) + ₹50 (profit) =₹150 ₹150 (included intotal) GST Rate 18% 18% — GST Amount ₹18 (on₹100) ₹27 (on ₹150) ₹27 (included in total) Total Price Paid — ₹118 (to Vendor) ₹177 (to Chotu) Input Tax Credit(ITC) — ₹18 (paid to Vendor) None Net GST Payable ₹ 18 ₹27 – ₹18 = ₹9 None (consumer) Conditions for Claiming Input Tax Credit Section 16 of the CGST Act – Eligibility for ITC Only a registered person can claim ITC on inputs, input services, or capital goods used in the course or furtherance of business. The goods or services must be used for business purposes and not for personal consumption. ITC is available only when the goods or services are actually received by the claimant. A valid tax invoice (or debit note) must be in the possession of the buyer. This invoice should detail the GST charged by the supplier. The supplier must have paid the GST to the government and must have filed the requisite returns, ensuring that the credit appears in the recipient’s electronic ledger. ITC must be claimed within the prescribed time limits—usually by the due date of the relevant return or before the claim for any refund is initiated. Section 17 of the CGST Act – Apportionment of Credit If goods or services are used partly for taxable supplies and partly for exempt supplies, the ITC must be apportioned accordingly. Full credit cannot be claimed if a part of the supply is exempt. Section 18 of the CGST Act – Verification and Matching For the ITC to be available, the details of the invoice provided by the supplier must match with those reported in the recipient’s GST returns. If discrepancies occur or if the supplier’s return is not filed, the ITC may need to be reversed. Additional Conditions and Restrictions (as per GST Rules and Notifications) ITC is not available on certain goods or services like: The claimed ITC must be utilized within a prescribed period, ensuring that it is not carried forward indefinitely. Additional supporting documents (such as debit/credit notes and e-way bills) are required to substantiate the claim. Chart Summary for Compliance for availing ITC Category Conditions & Requirements Eligibility (Sec.16) Registered person only Goods/services used for business Actual receipt of goods/services Documentation & Compliance Valid tax invoice or debit note E-way bill (if applicable) Time & Utilization ITC must be claimed within the due date ITC must be utilized within the prescribed period Supplier’s Filing & Payment Supplier must file GST return Tax must be paid to the government Apportionment (Sec.17) ITC must be apportioned for mixed supplies Full credit not allowed for exempt supplies Verification (Sec.18) Invoice details must match with GST returns ITC may be reversed if mismatch occurs Restrictions & Exclusions No ITC on personal use or blocked goods/services Certain motor vehicles, specific inputs excluded Written by – Haard Joshi