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Cloud Accounting Software Great Help in Bookkeeping And Taxation

In the accounting industry, cloud accounting is of major importance. Accountant and bookkeeper are moving their client off of desktop software and onto cloud accounting application to reap the many benefits of productivity, security, and collaboration that these tools offer.

So every businessman should keep the proper record of all expenses and income from all sources of income, so we can claim deduction and avail benefits. There is so many Cloud accounting software available who provide great service and maintain all record of daily income and expenses, the business transaction.

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Problem With Traditional Accounting

  • Customer support is expensive and slow
  • Difficult and time-consuming 
  • Only one person has user access
  • Data in the system is not up to date 
  • Its only work on one computer 
  • Data bounce from place to place.

Start getting to Make Tax Digital

Digital Tax will be more here before you know it. Start thinking about what it means for your practices and your client. We need to learn and thinking about how we will deliver the extra level of service that Uk small businesses will need.

 Way to Avail Benefits under Taxation

At the end of every financial year, many taxpayers frantically make the investment to minimize taxes, without adequate knowledge of variously available option. The income tax act offers so many types of the decision under a different section like 80C to 80U.

With the using of all cloud-based accounting software, we can avail so many benefits under Taxation with the help of the following instruction.

Save Tax on Rent Payment 

We get a job in a different city or place. We go there to do our job .if company would not provide any accommodation facility than we have to rent out the house. The expenses on rent should be deducted from taxable income

Tax saving from Home Loan 

Use the home loan efficiency to save the tax. Section 80C under income tax act allows the deduction up to RS 1,00,000. The interest portion offers a deduction up to 1,50,000 separate under section 24.

Leave travel allowance 

Every employee should use Leave travel allowance during the holiday, which is available twice in a block of four years, you could now carry forward one journey to the succeeding block % claim it in the first calendar year of that block.

Tax on Bonus 

A bonus from your employer is fully taxable in the year, which you received it. You should produce your tax investment detail well before, to prevent your employer from deducting tax on bonus before handing it over.

Buy a house with a parent or sibling as a joint owner 

You can buy property with your spouse/sibling/parents as co-owner, can claim the tax deduction of 1 Lacs for principal and 2 lacs for interest part. The exemption will be available in the ratio of loan amount 

A gift to major son/daughter

You can make investment and interest earned from them will be tax-free up to an exempted limit. if the same income is added in your income then you will be required to pay 30% tax.

HUF Creation 

HUF is considered as a separate entity which has its own PAN. Tax slab of HUF is same as that of an individual and qualify for all tax benefits under 80C,80D,80G,80L and so on.

Claim Deduction under 80C

Section 80C offers a maximum deduction of up to Rs 1,00,000, You can claim this section to the full limit. Few more option:-

  • National saving scheme 
  • Equity-linked saving scheme 
  • Life insurance premium
  • Fixed deposit with banks and post office 
  • Public provident fund 

Deduction beyond 80C

If you have claimed full limit of section 80C then you have more option like section 80D Deduction of Rs 15,000 is permissible for medical insurance of self, spouse, dependent child  & Section 80G for donation.

Standard Deduction

Standard deduction has been reintroduced in the  2018 budget, this deduction has replaced the conveyance allowance and medical allowance of Rs 40,000.

Professional Tax

The professional tax levied by the state government, just like income tax levied by the central Government. the maximum amount of professional tax that can be levied by the state government is Rs 2500.

Salary Restructuring 

Restructuring your salary may not always be possible, But if your company allow with your HR department, restructuring some function help in reducing tax liability

  • Opt for food coupons instead of lunch allowance 
  • Produce bills of actual expenses incurred for this allowances
  • Opt for company car instead of using of own car 

No one can remember all business transaction in a sequential manner. So Every businessman should prefer Business  accounting software to keep all business record in a secure manner to avail tax benefit under the Income tax act.

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