Who wouldn’t want to be Batman? A millionaire playboy by day and masked vigilante by night. Nothing to do except beat up bad guys, max out Credit Cards, attend fancy fundraisers with supermodels by your side, and watch your British butler complain every night about doing your dirty laundry. In short, every guy’s fantasy.
However, as fearless as Batman might be, there’s one adversary his alter ego just can’t quite beat. No, not the Joker. Not even Superman. We’re talking about the most dastardly villain of them all. The dreaded Taxman.
You can run around in your underwear all you want at night, but while you’re Bruce Wayne by day, you have to pay your taxes like everyone else. And if you’re an Indian citizen you’ll have to forget all about Gotham City, my friend. This is Gautam City.
However, one of Batman’s most impressive qualities is his ability to get out of tight situations. He can wrangle himself free from a sack full of cobras in the blink of an eye. Although it might not be that easy for any of us to escape the taxman’s clutches, there are ways you can pick holes in his sack by making use of some of the tax deductions available to you, especially if you’re self-employed like our pointy-eared crusader.
If you disregard his alter ego, Batman is in essence the ultimate freelancer. The only difference between him and you is that he offers his services for free, while Bruce Wayne files the Tax Returns. Since you don’t have the luxury of a mega fortune to fall back on, you need to earn your daily bread to put food on the table. And the last thing you want to do is give away a sizeable chunk of your income when the taxman comes calling.
Additional Reading: Tax filing for self-employed professionals
So, if you run your own business and love hanging upside down from your ceiling in your free time, here are six avenues through which you can reduce your tax liability:
- Interest on loans – Okay, so you don’t have a bazillion-dollar company like Wayne Enterprises to help you fund your other pursuits. But don’t worry about it. If you’ve taken out a loan in order to run your profession, then the good news is you can claim tax deductions on the interest you pay on the loan. Take that, Wayne Tech!
Additional Reading: Personal loan criteria for the self-employed
- Travel Expenses – Just like Batman needs the Batmobile to run his errands, chances are your business requires you to commute a fair bit to get things done. Any travel expenses that you incur for the purpose of carrying on your business can help reduce your tax outgo. It doesn’t matter if Batman has a way cooler car. At least your sputtering jalopy is helping you ease the vice-like grip of the taxman.
- Rent – Yeah okay, so Batman has inherited a massive cave and a mansion, and doesn’t have to pay rent. Some people are just born with silver spoons in their mouths. You on the other hand can reduce your taxable income by using the rent you pay for any place where you carry out your business. It could be your home, an apartment, an office space, or in Superman’s case, even a telephone booth.
- Employee Salary – If you’ve hired people to work for you, then any remuneration you pay them can be considerably reduce the amount of tax you need to pay. This could include anything from salaries, to bonuses, and commissions. You may not be paying them the big bucks Bruce Wayne pays Alfred, but hey, it all helps.
- Business Expenses – Ever wondered if Batman keeps bills of all the cool equipment he buys? Probably not. In any case, you can claim all the expenditure you incur to keep your business running as business expenses. This could include incidentals such as telephone expenses, internet expenses, office supplies, utilities, etc. Just make sure you maintain all the bills and receipts, so you can furnish them as proof when claiming these as business expenses.
- Tuition Fees – Here’s where you get to ‘one up’ your masked friend. Since Batman has no kids, and Catwoman always seems to give him the runaround, he can’t claim any deductions on their education. But if you have a couple of tykes running around at home, then any tuition fee that you pay towards their education can be availed as a tax deduction. Congratulations, looks like you finally bested Batman at something.
Additional Reading: Income Tax Deductions under Section 80C to 80U
Like Benjamin Franklin once said, “In this world nothing can be said to be certain, except death and taxes.” While some might prefer the former, you can certainly turn the taxman’s smile into a frown by following these little tips.
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