Income from taxi

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Querist : Anonymous

Querist : Anonymous (Querist)

16 September 2013 A person generate income from running taxi & he is also the owner of that taxi, so is his income will fall under head PGBP & how to calculate his income

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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16 September 2013 gross receipts - exp will be his profit and depreciation will also be allowed.
it is taxable under income from profession as you providing service to passenger for travelling.

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Querist : Anonymous

Querist : Anonymous (Querist)

16 September 2013 is service tax is also applicable to it & what will be its dep rate

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CA Pallav Singhania

CA Pallav Singhania (Expert)
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16 September 2013 Agree with expert,

Service tax is chargeable when the Taxable service amount is more than 10 lacs p.a...

Querist : Anonymous

Querist : Anonymous (Querist)

16 September 2013 i think its 9 lkh not 10 lkh

CA Pallav Singhania

CA Pallav Singhania (Expert)
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16 September 2013 9 lac is for the registration, not for the liability to pay service tax....

Querist : Anonymous

Querist : Anonymous (Querist)

16 September 2013 ok thanx for that one more thing would he require any type of licence or any other obligation othr then vehicle license

CA Pallav Singhania

CA Pallav Singhania (Expert)
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16 September 2013 For Service tax registration??

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Querist : Anonymous

Querist : Anonymous (Querist)

16 September 2013 no sir, actually i am talking about other obligation which is required in normal business or profession like p. tax & other

CA Pallav Singhania

CA Pallav Singhania (Expert)
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16 September 2013 Any person carrying his profession and his gross receipts exceeds 25 lacs then he's liable for Tax Audit under 44AB of IT act 1961...

Querist : Anonymous

Querist : Anonymous (Querist)

20 September 2013 is the driver require to take trade licence as he his filing his income under pgbp

Querist : Anonymous

Querist : Anonymous (Querist)

20 September 2013 if the taxi owner is not driving the taxi but he receive a fixed income from another person per day then can he file under other source

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Querist : Anonymous

Querist : Anonymous (Querist)

25 September 2013 no body is able to give the above answerss

Asha Kanta Sharma online

Asha Kanta Sharma

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31 July 2024 If a taxi owner is not actively involved in driving the taxi and instead receives a fixed income from another person who operates the taxi, the income would generally be classified differently. Here’s how you can handle this situation for tax purposes:

### **1. Income Classification**

#### **Income from Other Sources:**
- If the taxi owner receives a fixed amount as rent or income from another person who operates the taxi, this income can be classified under **"Income from Other Sources"**.

#### **Income from Business or Profession (PGBP):**
- If the owner is involved in the management or operation of the taxi business and the income is derived from business activities, it would fall under **“Profits and Gains of Business or Profession (PGBP)”**. However, since the owner is not involved in the operational aspect but merely receiving a fixed amount, this typically doesn’t apply.

### **2. How to Report the Income**

#### **Filing Income from Other Sources:**
- **ITR Form:**
- If the income is classified as **“Income from Other Sources”**, you would typically report it in **Schedule OS** of ITR-1 (if you are a resident individual with no other business income) or ITR-2, depending on your overall income and filing requirements.

- **Income Reporting:**
- You would report the fixed income received from the person operating the taxi under the relevant section for income from other sources.

### **3. Tax Considerations**

#### **No Business Deductions:**
- Since the income is not classified under business income, you cannot claim business-related deductions such as depreciation, fuel costs, or maintenance expenses.

#### **Taxation:**
- The income will be taxed as per the applicable slab rates for individuals under **“Income from Other Sources”**.

### **4. Legal and Documentation Considerations**

#### **Rental Agreement:**
- **Documentation:**
- Ensure there is a formal agreement or documentation for the fixed rental income received. This agreement should clearly outline the terms and the fixed amount being received.

#### **Income Proof:**
- **Record Keeping:**
- Maintain records of the rental income received, including any contracts or agreements with the person operating the taxi.

### **5. Consult a Tax Professional**

- **Expert Advice:**
- It’s a good practice to consult a tax professional or accountant to ensure proper classification and compliance with tax laws, and to address any specific concerns related to your income and tax obligations.

### **Summary**

If the taxi owner is not involved in the operational side of the business and merely receives a fixed income, it is typically reported as **“Income from Other Sources”** rather than business income. This approach avoids the complexities of business income reporting and associated deductions.

Asha Kanta Sharma online

Asha Kanta Sharma

(Expert)
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