Commission income

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

06 August 2013 An assessee (Sole Propreitor)is getting a commission income of Rs.7 lakh after deducting TDS under 194H by working from home without making any invoices for such.
Commission is recurring in nature

Can anyone explain:
How Commission income will be taxed? Under what Section and What head
What expenses can be claimed as deduction?
Should he maintain books of accounts?
What is the tax audit limit for such commission?
Should he issue bills?
Does he have register himself in any other Act. Eg: Service Tax, Shops & Establishment

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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06 August 2013 it is taxable as income from profession and exp incurred for earning such commision is allowed as deduction.

tax audit limit is 25 lakhs as per Finance act,2012.
Yes he should issue bills.
yes he needs to get reg with ser tax dept.

Querist : Anonymous

Querist : Anonymous (Querist)

06 August 2013 But the gross receipt does not exceed 9 Lakh for the purpose of Service Tax registration
Can you provide the section which specifies taxability as profession and not business
Also registration under other Acts also

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CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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06 August 2013 1. Commission income is taxable as business income.
2. Expenses that can be claimed as deduction can be Telephone exp, Internet Exp, Salary (if paid) and all other expenses incurred to earn the income.
3. Books of accounts are required to be maintained if the gross receipts exceed Rs. 10 lakhs or income exceeds Rs. 1,20,000
In this case of the income exceeds Rs. 1,20,000 he is required to maintain books of accounts.
4. Tax audit limit for AY 13-14 is Rs. 1 crore.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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06 August 2013 as per finance 2012 and as per 44 AB for professional persons the tax audit is 25 lakhs n not 1 crore as that fr business income.

Querist : Anonymous

Querist : Anonymous (Querist)

07 August 2013 So person havin commission income shall be regarded as professional or businessman

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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07 August 2013 Normally it will be BUSINESS income & NOT professional income.
What is the exact nature/source of the commission??

Querist : Anonymous

Querist : Anonymous (Querist)

07 August 2013 Actually an employee, but the employer does not wish to give salary instead he will provide Commission under 194H based on number of clients he provides to the employer
Amount will be paid on monthly basis

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CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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07 August 2013 Taxable as business income.

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