1. Choose the right structure
| Structure | Liability | Income tax (broadly) | Compliance |
|---|---|---|---|
| Proprietorship | Unlimited — the owner and the business are the same | Taxed as the owner’s income at slab rates | Lowest; no separate registration as an entity |
| Partnership firm | Unlimited, joint | Firm taxed at a flat rate; partners’ share of profit not taxed again | Low to moderate; registration with the Registrar of Firms is advisable |
| LLP | Limited | Taxed like a firm | Moderate; annual filings with the MCA; audit only above prescribed limits |
| Private limited company | Limited | Company tax; an optional concessional regime is available | Highest; statutory audit every year, board meetings, ROC filings |
Questions to ask before choosing: How much risk does the business carry? Will you bring in investors or need large bank loans? How many owners are there, and how will profits be withdrawn? Does any incentive you want have conditions about the type of entity? Converting later is possible but costs time, fees and sometimes stamp duty.
2. Registrations checklist
- PAN for the entity (a proprietor uses their own PAN) and TAN if you will deduct TDS on rent, salaries, contractor or professional payments.
- GST registration once turnover crosses the threshold (generally ₹40 lakh for suppliers of only goods and ₹20 lakh for services in Rajasthan), or at once if you sell goods inter-state, sell online through e-commerce platforms, or export. Rajasthan’s GST state code is 08.
- Udyam (MSME) registration — free and online, based on PAN and Aadhaar. Classification (revised from 1 April 2025):
- Micro: investment up to ₹2.5 crore and turnover up to ₹10 crore
- Small: investment up to ₹25 crore and turnover up to ₹100 crore
- Medium: investment up to ₹125 crore and turnover up to ₹500 crore
- Import Export Code (IEC) from the DGFT if you will export or import. It is PAN-based and must be updated or confirmed online every year, even if nothing has changed.
- Shops and establishments registration under the Rajasthan Shops and Commercial Establishments Act, through the state Labour Department’s online system.
- Labour registrations: EPF and ESI once employee numbers reach the applicable thresholds. The four labour codes have replaced many older labour laws, so check the current requirements.
- Sector and site approvals: factory licence, pollution consent from the Rajasthan State Pollution Control Board (consent to establish, then consent to operate), fire NOC, FSSAI for food businesses, and trade licence or building approvals from the local body. Many of these can be applied for through the state’s single-window clearance system.
3. RIPS 2024 at a glance
Check before you rely on it. The Rajasthan Investment Promotion Scheme 2024 (RIPS 2024) is amended and clarified through notifications. Eligibility, percentages, time limits and caps change. Always read the latest notification and guidelines on the official Rajasthan government / RIPS portal, or ask us to check, before you invest on the strength of an incentive.
RIPS 2024 is the state’s main incentive scheme for new enterprises and for expansion of existing ones in eligible manufacturing and service sectors. It gives extra benefits to thrust sectors, MSMEs and some categories of entrepreneurs and locations. At a high level, the benefits are of these types:
- Asset-creation incentive, offered as options such as an investment subsidy linked to the state GST (SGST) you pay, a capital subsidy, or a turnover-linked incentive. You normally choose one.
- Stamp duty exemption or reimbursement on purchase or lease of land and buildings for the project, and relief on land conversion charges in some cases.
- Electricity duty exemption for a specified number of years.
- Other exemptions and reimbursements in specified cases, such as land tax and mandi fee.
- Additional incentives such as interest subvention, employment-linked support, and incentives for green or sustainable investment and skilling.
Practical points:
- Timing: applications are usually tied to dates such as start of commercial production. Missing a deadline can mean losing the benefit entirely, so plan the application before you start production.
- Eligible investment: keep asset-wise bills, bank payment records and capitalisation details. Not every rupee spent counts as eligible investment.
- SGST-linked benefits depend on the SGST you actually pay, so GST returns and payments must be on time and accurate.
- Conditions continue: closing or shifting the unit early can lead to recovery of benefits already received.
- Tax treatment: subsidies can affect your income tax (for example, a capital subsidy can reduce the cost of assets for depreciation). Plan the accounting with your CA.
- The state also has separate MSME and export promotion policies. Check whether they suit your case better and whether benefits can be combined.
4. Compliance calendar basics
Once registered, these are the recurring deadlines most small and mid-sized businesses face. Exact dates for Tax Year 2026-27 are in our Compliance Calendar.
| Frequency | What | Typical due date |
|---|---|---|
| Monthly | TDS / TCS deposit | 7th of the next month (March deductions: 30 April) |
| Monthly | GSTR-1 (monthly filers) | 11th of the next month |
| Monthly | GSTR-3B (monthly filers) | 20th of the next month |
| Quarterly | TDS returns; GST returns under the quarterly (QRMP) scheme | See the calendar |
| Quarterly | Advance tax instalments | 15 June, 15 September, 15 December, 15 March |
| Annual | Income tax return and tax audit (if applicable), GST annual return, ROC / LLP annual filings, IEC update, LUT for exporters | See the calendar |
5. Mistakes we see often
- Starting production before applying for incentives, then finding the application window has closed.
- Mixing personal and business money in one bank account, which makes accounts, GST credit and incentive claims harder to prove.
- Choosing a structure for today only, then paying to convert when an investor or bank asks for a company.
- Skipping Udyam registration and losing MSME protections and scheme eligibility.
- Forgetting the LUT before the first export of the year.
- No document trail for capital investment, which weakens both subsidy claims and tax depreciation.