Tax Tips from Your Fellow Rotarian’s Desk: Notes from Vaarahi Consulting
As I send my “Good Morning” messages to fellow Rotarians each day with tax updates, I’m often reminded of how tax planning is much like our Rotary projects – it needs careful thought, strategic planning, and timely execution. At Vaarahi Consulting, we’ve been observing significant changes in India’s tax landscape that I believe every Rotarian should know about.
Let me share what’s brewing in our tax world, straight from my morning updates to you. First, some excellent news for many of our members – if your income is up to ₹7 lakhs, the new tax regime ensures you won’t be paying any income tax. For my salaried friends in Rotary (and I know there are many of you!), this extends to ₹7.5 lakhs, thanks to the standard deduction of ₹50,000.
Here’s something I’ve been advising my professional clients at Vaarahi Consulting: if you’re running a professional practice with annual receipts under ₹50 lakhs (or ₹75 lakhs with 95% banking channel receipts), Section 44ADA might be your best friend. It offers a simplified presumptive taxation system – but remember, it’s a five-year commitment!
For our Rotarians managing companies, I’ve been highlighting a choice you need to make carefully: opt for the reduced 22% tax rate (effective 25.17%) under Section 115BAA, or stick with the traditional 30% rate. At Vaarahi, we’ve been analysing this extensively – if your company makes substantial charitable contributions, the traditional rate might actually serve you better due to Section 80G benefits.
Speaking of which, many of my morning updates focus on CSR activities. Remember, while CSR spending isn’t directly linked to tax benefits, routing these funds through eligible charitable trusts can still qualify for Section 80G deductions – something worth considering for both your company and our Rotary initiatives.
As I tell my clients at Vaarahi Consulting, and now share with my fellow Rotarians – good tax planning is like our Four-Way Test: Is it the truth? Is it fair? Will it benefit all concerned? Will it build goodwill and better friendships? Let’s make sure our tax decisions check all these boxes!
Rtn. Elango from RC Aarch City is the founder of Vaarahi Consulting, a Chennai-based financial advisory firm. Known for his daily “Tax Morning” updates, he helps fellow Rotarians and clients navigate India’s tax landscape with clarity and wisdom.
