Proprietorship vs Private Limited — Which Business Structure Is Costing You More Tax?
You started as a proprietorship because it was simple. No registration fees, no board meetings, no compliance headaches. Just you, your business, and a bank account. But somewhere between ₹10 lakhs and ₹50 lakhs in annual income, something changes — and your simple proprietorship starts costing you significantly more tax than a Private Limited Company would. Most business owners in Coimbatore never find out about this tipping point until they have already lost lakhs. This guide will show you exactly where that point is — and what to do about it. Why Business Structure Is the Most Ignored Tax Decision When people start a business, they choose a structure for convenience — not for tax efficiency. A proprietorship is easy to open. A Private Limited Company sounds complex and expensive. So most people default to proprietorship and never revisit the decision. This is a mistake that compounds every year. Your business structure determines: The tax rate applied to your pro...