Tax Deduction Eligibility

Most salaried professionals lose money every year because they skip one simple form. It is called Form 10E. If you ever receive arrears of salary, bonus, family pension, gratuity, or even advance salary, you might be paying more tax than you should. The Income Tax Act already knows this is unfair, which is why Section 89 relief exists. But you only get that relief if you file Form 10E. So many employees think “my employer adjusted TDS, so I am done.” The truth is, if you do not file this form on the portal before your ITR, your claim is automatically disallowed. No exceptions. And yes, the department can send you a notice if you missed it. 📌 Mini checklist before filing: - Compute the arrears portion separately. - Log in to the income tax portal. - Fill and submit Form 10E online (no offline option exists). - File ITR only after submitting Form 10E. - Keep computation proofs and salary slips safe. Every month, I see young professionals say, “I wish someone guided me earlier.” Tax reliefs do not happen magically. You need to know the rules, apply them, and keep showing up with the right compliance. If you are salaried, make Form 10E your habit whenever arrears or bonuses come in. One small form, years of relief.

The Finance Act, 2023 introduced Section 43B(h) in the Income Tax, impacting how deductions for payments to #MSMEs will be calculated. 1. Shift from Accrual to Actual Payment Basis: Previously, deductions were based on the accrual basis (when the liability to pay arose), but now they are allowed on an actual payment basis. This shift influences business practices, emphasizing timely payments to MSMEs. 2. Threshold Limit and Criteria for MSME Classification: The new clause (h) applies to payments made to MSMEs (registered manufacturers or service providers on the UDYAM Portal). 3. The classification criteria for enterprises are as follows: Micro: Investment in Plant and Machinery or Equipment ≤ ₹1 crore and Annual Turnover ≤ ₹5 crores. Small: Investment in Plant and Machinery or Equipment ≤ ₹10 crores and Annual Turnover ≤ ₹50 crores. Medium: Investment in Plant and Machinery or Equipment ≤ ₹50 crores and Annual Turnover ≤ ₹250 crores. 4. Buyer’s Liability to Pay Within Time Limits: As per Section 15 of the MSME Act, 2006, the buyer must pay within specific time limits: - Within 15 days of acceptance/deemed acceptance of goods/services (if no written agreement exists). - Within the date specified in the written agreement (not exceeding 45 days from acceptance/deemed acceptance). Timely payments within these limits allow expenditure deduction on an accrual basis. 5. Impact and Compliance Burden: - Positive Impact: Encourages timely payments, promoting MSMEs’ financial health. - Compliance Burden: Enterprises must meticulously classify and document creditors. - Potential Effects: Increased operating costs and potential shifts in business models123. Crux: While the amendment aims to benefit MSMEs, it also places responsibilities on businesses to adhere to payment timelines and maintain accurate records. The amendment to Section 43B is a strategic move to prompt timely payments to MSMEs, promoting their financial health. However, it places a compliance burden on enterprises, necessitating meticulous classification and documentation of creditors. What do you think will be the impact here?

Powerful strategy for solopreneurs: - Start an LLC - Grow and Become an S Corporation: This can provide significant tax advantages by allowing you to split your income between salary and distributions, potentially reducing your overall tax liability. But make sure to optimize the qualified business income deduction - Pay Yourself a Reasonable Salary: As an S Corp owner, pay yourself a reasonable salary that reflects the market rate for your role. This salary is subject to payroll taxes, but any additional profits can be taken as distributions, which are not subject to self-employment tax. - Add a Solo 401(k) and Max It Out: Establish a Solo 401(k) plan to take advantage of tax-deferred retirement savings. As both the employer and employee, you can contribute up to the maximum allowable limit, significantly boosting your retirement savings while reducing your taxable income. But make sure your salary is not too low, it will impact what can go in here - Employ Your Spouse: If your spouse can perform meaningful work for your business, employ them and pay a fair salary. - Max Out Solo 401(k) for Spouse: By employing your spouse, you can also contribute to their Solo 401(k) plan, further increasing your family's retirement savings and reducing your taxable income - Backdoor Roth IRA for Each: Utilize the backdoor Roth IRA strategy for both you and your spouse. This involves making non-deductible contributions to a traditional IRA and then converting those funds to a Roth IRA, allowing for tax-free growth and withdrawals in retirement - Maximize Qualified Business Income Deduction (QBID): Take full advantage of the Qualified Business Income Deduction (QBID), which allows eligible S Corp owners to deduct up to 20% of their qualified business income (or lesser of that and 50% of w2 wages). This can significantly reduce your taxable income and increase your overall tax savings. - If salary is too low to max solo 401(k), then do mega backdoor Roth 401(K) to the $69,000 limit Implementing these strategies can help solopreneurs optimize their financial planning, reduce tax liabilities, and build substantial retirement savings

The new Tax Law didn't just tweak the code It rewired it for business owners who know how to play offense. Entrepreneurs, investors, and small business owners now have access to powerful deductions and permanent rules that create certainty. Here are the key takeaways: 1) QBI Deduction Made Permanent The 20% deduction for qualified business income (QBI) from partnerships, S corps, sole proprietorships, REIT dividends, and MLP income is here to stay. This stability fosters long-term planning for flow-through owners. 2) Expanded Eligibility Phase-in thresholds are now $75K (individual) and $150K (joint). More taxpayers qualify, widening access to meaningful tax savings. 3)Minimum $1,000 QBI Rule Even modest business income of $1,000 guarantees access to the deduction. Startups and small ventures win here. 4)100% Bonus Depreciation, Permanent Full expensing of qualified property like machinery and equipment is now locked in, improving cash flow and fueling growth investments. 5)Boosted Section 179 Expensing The limit rises to $2.5 million, giving more SMEs the ability to expense critical capital expenditures upfront. These changes create predictability, and flexibility in structuring business operations. Timing purchases and coordinating with your CPA will be critical to maximizing benefits. The OBBBA did more than tweak the rules. It gave business owners permanent tools to keep more cash, plan with confidence, and accelerate growth.

Most high-income professionals overpay in taxes not by a little, but by hundreds of thousands of dollars. And the worst part? Most of them don’t even realize it’s happening I recently worked with an executive who was unknowingly missing out on over $500,000 in potential tax savings. Like many high-income professionals, she assumed her CPA was handling everything. But here’s the problem: 🚫 Most CPAs think backwards, not forwards. They file taxes based on what already happened. 🚫 They don’t integrate financial planning, investments, and tax strategy. 🚫 Some of them miss opportunities that can save you money long-term. How We Fixed It & Saved Her Over $500K ✅ 1. The HSA Strategy – $20K+ in Lifetime Tax Savings She had access to an HSA (Health Savings Account) but wasn’t using it. Why does this matter? 👉🏾HSA contributions are tax-deductible. 👉🏾The money grows tax-free. 👉🏾Withdrawals for medical expenses are tax-free. By fully funding it every year, she’ll save $20,000+ in taxes over her lifetime. But here’s the kicker: we also helped her invest it properly so the account grows instead of just sitting in cash. ✅ 2. The Roth Conversion Strategy – $500K+ in Tax-Free Growth She was anticipating losing her job and had multiple old retirement accounts just sitting there. Instead of letting those accounts stagnate, we saw an opportunity: 👉🏾She was having a low-income year, which meant she could convert $100,000 into a Roth IRA at a lower tax rate. 👉🏾That $100K will now grow tax-free—meaning if it reaches $600K or $700K in retirement, she’ll never pay a cent in taxes on that money. ✅ 3. The Bonus Strategy – Tax-Loss Harvesting We also helped her offset investment gains using tax-loss harvesting, a strategy that allows you to sell underperforming investments and use the losses to reduce your tax bill. By combining these strategies, we helped her: 💰 Save $20K+ in taxes on HSA contributions 💰 Unlock $500K+ of future tax-free income through Roth conversions 💰 Offset capital gains and lower her tax bill through tax-loss harvesting And she almost missed out on all of this because she assumed her CPA was handling everything. If you’re making multiple six figures, but you aren’t actively planning your tax strategy, you’re leaving money on the table plain and simple. The best financial strategies aren’t about making more money they’re about keeping more of what you earn. If you want to see where you might be overpaying, shoot me a message. Let’s make sure you’re taking advantage of every opportunity. P.S See the look on my face…don’t make me have to give you that look because you’re paying more than your fair share in taxes. 😂

Are Family Offices Prepared to Adjust Before the Tax Rules Change Again? The latest tax proposal from the House includes several important changes. These updates favor direct real estate ownership and long-term planning for Family Offices! Some of the benefits include: ➤ Return of 100 Percent Bonus Depreciation Tax Code Reference: IRC Section 168(k) What Changed: The proposal brings back full bonus depreciation for qualifying real estate and equipment. This applies from 2025 through 2029. What It Means: You can fully deduct the cost of new improvements or property purchases in the year they are placed in service. This can significantly reduce taxable income. What Family Offices Should Do: • Focus on industrial, multifamily, and medical office properties, which are already preferred for stability. • Plan capital improvements or acquisitions now to be ready by the 2025 start date. • Work with tax and legal advisors to ensure the timing and structure meet eligibility requirements. ➤ Section 199A Deduction Increase from 20 Percent to 23 Percent Tax Code Reference: IRC Section 199A What Changed: The deduction for Qualified Business Income (QBI) from pass-through entities may increase to 23 percent. What It Means: More income from LLCs, partnerships, and S corporations will be shielded from tax. Family Offices Should: • Review all operating entities to confirm QBI eligibility. • Adjust ownership models if needed to increase tax efficiency. • Update tax projections for each major holding. ➤ Possible Expansion of Opportunity Zones Tax Code Reference: IRC Sections 1400Z-1 & 1400Z-2 What Changed: The bill suggests the creation of new Opportunity Zones. What It Means: Family Offices may have a second chance to invest gains in tax-advantaged projects. Holding qualified OZ assets for 10 years may lead to tax-free growth. Family Offices Should: • Track new zone OZ designations. • Consider how new investments can align with estate and legacy planning. • Reassess earlier OZ investments that may not have met timing or structure goals. ➤ The Larger Message What Changed: The policy direction supports long-term real asset investment, cash flow, and stability. What It Means: This is not just technical tax reform. It is a signal that well-structured real estate plays will continue to be a core tool for wealth preservation. Family Offices Should: • Revisit entity structures and estate planning strategies. • Align legal, investment, and tax teams to ensure the portfolio is optimized. • Avoid the trap of waiting. The advantage lies in acting before changes are fully implemented. What does it all mean? This is the moment for Family Offices and other real estate investors to revisit their portfolios, assess their structure, and make decisions that can protect and grow wealth for the next decade. This is how I see the opportunity. Are there other benefits you’re seeing? Smart tax strategy is proactive. And right now, the window is open.

Tax Deductions: A Key Tax Concept Tax deductions reduce the amount of income subject to tax, lowering the overall tax liability. They are subtracted from a taxpayer’s gross income to determine the taxable income. Types of Tax Deductions: - Standard Deduction: A fixed dollar amount that reduces the income you’re taxed on. The amount varies based on filing status (e.g., single, married filing jointly, head of household). - Itemized Deductions: Specific expenses can be deducted from your gross income. Common itemized deductions include mortgage interest, state and local taxes, medical expenses, and charitable contributions. Common Itemized Deductions: - Mortgage Interest: Interest paid on a mortgage for your primary residence or a second home. - State and Local Taxes (SALT): Includes state and local income taxes, sales taxes, and property taxes, with a cap of $10,000. - Medical and Dental Expenses: Unreimbursed medical expenses that exceed 7.5% of your adjusted gross income (AGI). - Charitable Contributions: Donations to qualified charitable organizations. - Casualty and Theft Losses: Losses from federally declared disasters. - Above-the-Line Deductions: These deductions are subtracted from your gross income to calculate your AGI. They are available to all taxpayers, regardless of whether they itemize. - Examples include contributions to traditional IRAs, student loan interest, and educator expenses. Business Deductions: Self-employed individuals and business owners can deduct business-related expenses. These include costs such as office supplies, travel expenses, and advertising. - Depreciation of business assets is also a significant deduction. Eligibility and Limits: - Each deduction has specific eligibility criteria and limits. For example, the deduction for medical expenses is only available for expenses that exceed a certain percentage of AGI. - It’s essential to keep detailed records and receipts to substantiate your deductions. Impact on Tax Liability: - Deductions reduce taxable income, which can lower the overall tax liability. - Choosing between the standard deduction and itemizing depends on which option provides the greater tax benefit. Example: Imagine a taxpayer, Lisa, who has significant medical expenses and mortgage interest payments. She decides to itemize her deductions instead of taking the standard deduction. By doing so, she reduces her taxable income by a larger amount, resulting in a lower tax bill.

Most business owners overpay taxes—not because they have to, but because they don’t know better. Every year, I see entrepreneurs losing lakhs simply because they aren’t aware of tax strategies designed to help them save. The best part? These strategies are 100% legal and used by the smartest business owners to optimize their tax outflows. If you’re a business owner, read this carefully—it could save you serious money. 1. Choose the Right Business Structure Your legal entity matters more than you think. Sole proprietorship, partnership, LLP, or a private limited company—each has its own tax benefits and drawbacks. The right structure can reduce your tax liability significantly. A sole proprietor might pay taxes at individual slab rates, while an LLP or Pvt Ltd company may offer better tax efficiency depending on revenue, compliance costs, and future growth plans. The key? Get expert advice and choose wisely. 2. Claim Every Business Expense Possible One of the biggest mistakes small business owners make is not claiming all eligible deductions. If it’s a business-related expense, it’s tax-deductible. Office rent, utilities, internet, software, employee salaries, marketing expenses, travel costs for work, depreciation on equipment—the list is long. Keep proper records and claim everything you legally can. You’ll be surprised how much this one habit can save you in taxes. 3. Don’t Ignore GST Input Credit If you’re paying GST, you must claim input tax credit on business-related expenses. This reduces your net GST payable and can save lakhs every year. Many businesses either don’t know about this or don’t track their eligible credits properly. If you're paying GST on rent, advertising, professional fees, or software—get that credit back. 4. Use Presumptive Taxation for Simplicity & Savings For businesses with revenue up to ₹3 crore and professionals earning up to ₹75 lakh, the government allows presumptive taxation—a fixed profit percentage of revenue is taxed instead of maintaining detailed accounts. Businesses: Tax is calculated on just 6% of total revenue (if digital payments) or 8% (if cash-based). Professionals: You can declare 50% of revenue as profit and pay tax only on that amount. No detailed books, no audits—just tax savings and peace of mind. The truth is, tax planning is not just for big corporations—it’s for every business owner who wants to keep more of what they earn. In life, only two things are constant—death and taxes. We can’t avoid the first one, but we can definitely optimize the second. If this helped you, share it with a fellow entrepreneur who needs to stop overpaying taxes. Let’s build wealth the smart way. #taxsavings #businessgrowth #entrepreneurship #smallbusinessowner #taxplanning #financialfreedom #gst #incometax #wealthbuilding #taxstrategies #moneytips #businessowner #startupindia #ca #taxconsultant #savemoney #investmenttips #financialliteracy #finance101 #legaltaxhacks

Myth: R&D Tax Credits Are No Longer Worth It for Startups and SMEs The R&D tax credit landscape has changed, with increased HMRC scrutiny and shifting rules. While the claim process is now more challenging, early-stage startups and established SMEs can still secure valuable tax relief - when they approach claims correctly. What’s changed? More compliance checks – HMRC is reviewing more claims, but it is still only a select number that are actually checked. Stricter documentation expectations and additional reporting requirements – Businesses need to clearly show their R&D activities align with HMRC’s definition. The move to a single scheme (April 2024) – This simplifies some aspects but also changes how relief is calculated, especially for SMEs where the rate of relief has reduced significantly. What hasn’t changed? Genuine R&D is still eligible – If your work tackles scientific or technological uncertainty, you can claim. Tax relief still boosts cash flow – Even at reduced rates, a successful claim can provide a welcomed cash injection for your business via tax credits (if loss-making) or reduced Corporation Tax (if profitable). Working with experienced advisors is still advisable – Startups and SMEs engaged with experts who understand HMRC’s evolving expectations are still making successful claims. The Numbers Tell the Story Fewer businesses are claiming R&D relief – Many SMEs are hesitating due to confusion or fear of compliance checks. HMRC scrutiny is higher – While not every claim is checked, businesses should be prepared in case HMRC asks questions. Successful claims are still being paid – Most companies that document their claims well are still receiving tax relief without issues. The Real Risk? Missing Out on Funding You Deserve If your business is genuinely innovating, there is still every reason to claim R&D tax relief. The key is proper documentation and understanding HMRC’s expectations. Are the changes affecting your approach to claiming R&D tax relief?

Washington just dropped a legislative bombshell on the real estate world — and it’s packed with opportunity for those who know how to act fast. The One Big Beautiful Bill Act, signed into law on July 4, 2025, isn’t just a tweak to the tax code — it’s a complete reshaping of how investors structure deals, time acquisitions, and unlock tax advantages. Here’s what stands out: ✅ 100% Bonus Depreciation is Back — Qualifying property placed in service after Jan. 19, 2025 can be written off in year one. With the right cost segregation, that could mean millions in deductions on a single deal. ✅ Section 179 Expensing Expanded — Up to $2.5M of certain property improvements can be deducted immediately. Perfect for projects under $5M that need big upgrades without slow depreciation schedules. ✅ Green Incentives on a Countdown — Energy-efficient building deductions (179D) and residential credits (45L) phase out after June 30, 2026. If sustainability is part of your plan, the clock is ticking. ✅ 1031 Exchanges Stay Alive — Pairing exchanges with bonus depreciation just became a tax-efficiency powerhouse. ✅ New Opportunity Zones Coming in 2027 — Fresh designations mean new chances to align with growth markets early. This law is live now — and some of its best incentives are already on the clock. The investors who adjust fastest will capture the biggest benefits. At CPI Capital, we’re already mapping how these changes influence underwriting, project feasibility, and long-term returns. If you’re planning acquisitions, developments, or value-add projects in the next 24 months, now is the time to align your tax strategy with the new rules. #cpicapital #realestateinvesting #taxstrategy #wealthbuilding #obbba2025