194H Income

This query is : Resolved

Accounts & Tax Consultant (Querist)
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04 July 2023 Respected Sir,

One of my client - Enrolled as an Advocate in Bar Council during last year.

He also runs a Software Consultancy and operating a Total T.O of Rs. 50L during previous year

Also he has Commission Income - TDS Deducted U/s 194H of Income Tax Act 1961.

I request your Advise on How to prepare Financials and File Income Tax for him

Ques 1: Can I declare his Software Consulting T.O of 50L under 44AD and declare 6 % / 8%

Ques 2: Also can i show Commission Income (TDS Deducted U/s 194H) in 44AD and declare 6% / 8%

Ques 3: What will be the Complication of Filing Business ITR for Advocates

Kindly advise

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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04 July 2023 1. Income from software consultancy can be declared u/s. 44ADA, provided max. TO up to Rs.50 lakhs.
2. No, commission income cannot be declared u/s. 44AD of the act.

Accounts & Tax Consultant

Accounts & Tax Consultant (Querist)
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04 July 2023 Respected Sir,

Many Thanks for your clarifications.

Kindly advise, If Commission Income Cannot declared under 44AD

Then shall I use ITR 3 and declare the combined Gross Receipts (Software Receipts + Commission ) and Declare Actual Profit

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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04 July 2023 You need to file ITR 3, but you cannot aggregate professional receipts and TO of commission business. You need to declare both the activities under respective tables.

Accounts & Tax Consultant

Accounts & Tax Consultant (Querist)
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04 July 2023 Thanks much sir

And one more question please

So we need to select - 2 Business under Nature of Business

and to Declare T.O and respective Profit separately

Some Consultants saying that for Commission Income we need to declare not less than 50 % of profit - I hope it will not comes under ITR 3

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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04 July 2023 No need for declaration of minimum 50% profit in commission business. It should be as per actual with proofs of income and expenses incurred.

Accounts & Tax Consultant

Accounts & Tax Consultant (Querist)
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05 July 2023 Respected Sir,

Thanks much for your Explanation.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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05 July 2023 You are welcome.

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