💰 Tax Savings · Structure & split income
Choose the right entity — proprietor vs firm vs LLP vs company
✍️ EaseValue Advisors · Updated 17 Jul 2026 · FY 2025-26
In short
The form your business takes changes its tax rate and flexibility. Proprietor is taxed at slab; a firm/LLP at 30%; a company at 22%/15% — choosing (and switching) well saves a lot.
The rates
- Proprietor / HUF: your personal slab (0–30%) — best at lower income (uses your exemptions and lower slabs).
- Partnership firm / LLP: flat 30% + surcharge; partners draw deductible remuneration and interest (Section 40(b)).
- Company: 22% (Section 199, old 115BAA) or 15% for a new manufacturer (old 115BAB) — best for higher, retained profits.
Rule of thumb
Low profit → proprietor/HUF (slabs & exemptions). High, reinvested profit → company (22%/15%). Professional partnerships → LLP with partner remuneration. We model the break-even for your exact numbers before you choose or convert.
The law behind it
Section 199 (old 115BAA/115BAB) Section 40(b)
General information for FY 2025-26 (AY 2026-27), not advice on your specific case. Limits, rates and conditions
change with each Finance Act and depend on your facts — confirm before acting. © EaseValue Advisors LLP.
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