Tax Optimization & Advisory

Guidance on tax-saving measures, expense optimization, and structuring.

Effective tax planning is key to increasing business profitability while ensuring full compliance with tax laws. With strategic tax structuring, businesses can reduce tax liabilities, optimize expenses, and benefit from legal deductions.

At Tax360, we offer expert guidance to help businesses navigate complex tax structures, ensuring they take full advantage of tax-saving opportunities while staying compliant with the latest regulations, including updates from the Union Budget 2025-26.

Key Tax Optimization Strategies for Businesses

The following table provides a structured overview of major tax-saving strategies under the Income Tax Act:

Tax Optimization Area	Relevant Income Tax Section	Key Benefits	Latest Budget 2025-26 Update
Presumptive Taxation for Small Businesses	Section 44AD	Pay tax on only 8% (cash) or 6% (digital) of turnover, without maintaining books of accounts.	Turnover limit increased from ₹2 crore to ₹3 crore.
Presumptive Taxation for Professionals	Section 44ADA	Professionals (consultants, doctors, freelancers) can pay tax on 50% of receipts.	Limit increased from ₹50 lakh to ₹75 lakh.
Deductions for Business Expenses	Section 37(1)	All expenses incurred for business (rent, salaries, utilities, advertising) are deductible.	Increased scrutiny on high-value expenses to prevent misuse.
Depreciation Benefits	Section 32	Claim depreciation on assets to reduce taxable income.	No major changes, but enhanced tracking of fixed asset purchases.
Startup Tax Exemptions	Section 80-IAC	Startups registered with DPIIT enjoy 100% tax exemption for 3 consecutive years.	Extended eligibility for startups until March 2026.

What This Means for Businesses

Presumptive taxation helps small businesses & professionals reduce compliance burdens.
Deductible business expenses lower overall taxable income.
Depreciation claims allow tax deferrals while maintaining asset investment.
Startups can enjoy tax-free growth under Section 80-IAC.

Maximize Deductions with Smart Expense Structuring

Properly categorizing expenses ensures higher deductions and reduced tax outflows.

Expense Type	Relevant Section	Eligibility & Limits	Latest Budget 2025-26 Update
Employee Salaries & Benefits	Section 37(1)	Fully deductible if paid through banking channels.	Increased tax scrutiny on high-value director remuneration.
Rent & Lease Payments	Section 30	Deductible for business premises, machinery leases, and warehouses.	No major changes.
Interest on Business Loans	Section 36(1)(iii)	Interest paid on loans for business purposes is deductible.	Increased AI-based tracking of loan-to-expense ratio.
Research & Development (R&D) Expenses	Section 35	100% deduction for in-house R&D expenses.	Phased reduction of some R&D incentives post-2026.
Corporate Social Responsibility (CSR) Spending	Section 80G/115BBE	Certain CSR donations qualify for deductions.	Restrictions on CSR deductions continue.

What This Means for Businesses

Proper classification of expenses helps maximize deductions.
Loan interest deductions ease financing costs.
R&D incentives drive business innovation.

Strategic Tax Structuring for Higher Efficiency

A well-structured business model can minimize tax liability while improving operational efficiency.

Tax Structuring Strategy	Key Benefits	Latest Budget 2025-26 Update
Shifting to LLP Structure	Lower tax rates, reduced compliance burden.	No changes, but LLP taxation scrutiny increased.
Dividend Distribution vs Salary Payouts	Optimized tax liability for directors/shareholders.	Increased monitoring of high dividend payouts.
Capital Gains Planning	Strategic sale timing to reduce tax impact.	Introduction of higher surcharge for HNWIs.
Investment in Tax-Saving Instruments	Section 80C, 80D, 54	Reduce tax burden through EPF, PPF, health insurance, and property investments.

What This Means for Businesses

Choosing the right business structure impacts tax liability.
Optimizing dividends vs salaries ensures better tax efficiency.
Capital gains planning prevents excess tax outflows.

TAX360 ROLE

Customized Tax-Saving Strategies – Maximize deductions & optimize tax structures.
Presumptive Taxation Assistance – Navigate Sections 44AD & 44ADA effectively.
Expense Categorization Support – Ensure full compliance under Sections 37(1), 36(1)(iii), & 35.
Stay Ahead of Tax Law Changes – Adapt seamlessly to Union Budget 2025-26 updates