Can a salaried person own a business?

Income Tax
1

hi,

Let say ,One is working in a private company and earns 31 Lakhs per annum. Without deductions, according to old regime , tax to be paid will be around 7 lakhs and for new regime is around 6 lakhs.

He thought of investing this amount by starting a company of his own and maintain expenses and declare them to reduce above tax from his salary.

Can this be even possible? If yes, Should he opt for new regime or old regime? will it be ITR 3?

2

Hey @Justin,

Even if you invest the amount in starting a business, you would have to pay the applicable taxes on the salary income.

In the case of business, the expenses that you claim can help you reduce the tax liability to the profits that your business would generate and not on the initial capital that you invest.