Taxable business

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 April 2012 sir, if a mr.x is carrying the business of purchasing and selling of milk pakets (500 ml and 1 ltr), and earning of 1 rs in a one transaction,

so it will be consider as trading business or commission agent service..//

Murtaza I Bhagat

Murtaza I Bhagat (Expert)
Follow

20 April 2012 there is difference between business income & commission income

if mr.x is purchasing milk packets with Dealer price i.e if milk packet mrp is Rs.10 and mr.x is receiving in Rs.9 then it will be called as business income even 0.50 paisa will called as business income

if mr.x is getting Rs.1/packet and its fixed by your seller then it will be called as commission and may be investment is doing by mr.x seller

CA Kishore Tallam

CA Kishore Tallam (Expert)
Follow

20 April 2012 U see whether he is purchasing the milk packets or just acting as an agent to the dealer based on which this will be decided. Even in any case, it will be assessed under head B/P. If trade, will be assessed as business, else it will be assessed as profession based on which provisions of tax audit will apply.

Upgrade to CAclubindia Pro. Subscribe Now!