Manpower Recruitment Agency
This query is : Resolved
06 December 2010
I run a Manpower Recruitment Agency and I am expecting my total gross receipts for the FY 2010-11 to be more than Rs 20 lakhs. Can you please tell me if I need to get my books audited? If yes, where can I find a good auditor, who does not charge me too much. I am in Mumbai.
I also want to know that being a porprietor, can I claim exemtion of medical bills?
I also want to know that being a porprietor, can I claim exemtion of medical bills?
07 December 2010
Dear Himani
If your client is deducting TDS U/S 194C (i.e as contractor) then no tax audit applicable to you, but if they are deducting TDS U/s 194J (i.e. professional) then your income is exceeding Rs 15 lacs then Tax audit will be applicable to you.
You can not claim exemption in case of your medical bills as it is your personal expenditure. In case of Medical premium paid in cash you can claim deduction U/S 80D of income tax act, 1961
If your client is deducting TDS U/S 194C (i.e as contractor) then no tax audit applicable to you, but if they are deducting TDS U/s 194J (i.e. professional) then your income is exceeding Rs 15 lacs then Tax audit will be applicable to you.
You can not claim exemption in case of your medical bills as it is your personal expenditure. In case of Medical premium paid in cash you can claim deduction U/S 80D of income tax act, 1961
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07 December 2010
Thanks for your revert Sachin. My clients deduct 10% TDS (I guess this is U/S 194J). Pls clarify again if I need an audit to be done.
07 December 2010
Ya you have to do audit u/s 44AB as your gross receipt exceeds slab limit.
If u have to do audit or want any clarification please send me test mail on my ID "YSINCOME.TAX@gmail.com".
Thanx & regards
If u have to do audit or want any clarification please send me test mail on my ID "YSINCOME.TAX@gmail.com".
Thanx & regards
07 December 2010
The provisions of the Income Tax Act,1961 governing the TAX Audit is contained in section 44Ab.
A person carrying on business has to get its accounts audited if the total sales, turnover or gross receipts in business, exceeds Rs. 60 lacs ( raised from present limit of Rs. 40 lacs).
A person carrying on the profession is required to get its accounts audited if the gross receipts in profession for the previous year exceed Rs. 15 lacs (raised from present limit of Rs. 10 lacs).
There is a thin dividing line for the applicability of Sec. 194 C and 194 J. If the servies provided is of the professional nature, then sec. 194 J is applicable and in that case the ceiling of Rs. 15 lacs would be applicable. Else, the ceiling of Rs. 60 lacs is applicable.
A person carrying on business has to get its accounts audited if the total sales, turnover or gross receipts in business, exceeds Rs. 60 lacs ( raised from present limit of Rs. 40 lacs).
A person carrying on the profession is required to get its accounts audited if the gross receipts in profession for the previous year exceed Rs. 15 lacs (raised from present limit of Rs. 10 lacs).
There is a thin dividing line for the applicability of Sec. 194 C and 194 J. If the servies provided is of the professional nature, then sec. 194 J is applicable and in that case the ceiling of Rs. 15 lacs would be applicable. Else, the ceiling of Rs. 60 lacs is applicable.
26 December 2010
Thanks for answering to my query. I have one more query for my friend.
One of my friends wants to start a company which will offer services like manpower recruitment, overseas education, immigration, and travel services. Can anybody pls suggest under what category shud he get his service tax registration? If he registers under Manpower Recruitment Agency category, can he later provide other services as well under the same s.tax regn no? Or it can be changed at a later stage as well. Or is there any category which may cover all professional services? Thanking u for ur help.
Rgds
Himani
One of my friends wants to start a company which will offer services like manpower recruitment, overseas education, immigration, and travel services. Can anybody pls suggest under what category shud he get his service tax registration? If he registers under Manpower Recruitment Agency category, can he later provide other services as well under the same s.tax regn no? Or it can be changed at a later stage as well. Or is there any category which may cover all professional services? Thanking u for ur help.
Rgds
Himani
03 August 2024
### 1. **Audit Requirement for Manpower Recruitment Agency**
#### **Audit Requirement for Financial Year 2010-11:**
- **Threshold for Audit:**
- As per the Income Tax Act, 1961, if your gross receipts exceed **Rs. 1 crore** in a financial year, you are required to get your books of accounts audited under Section 44AB.
- Since your expected gross receipts are more than Rs. 20 lakhs, you fall well within the threshold for mandatory audit. Therefore, you need to have your books audited.
- **Finding an Auditor:**
- To find a good auditor in Mumbai, you can consider:
- **Referrals:** Ask for recommendations from other business owners or professional networks.
- **Online Listings:** Check directories of Chartered Accountants (CAs) or professional organizations like the Institute of Chartered Accountants of India (ICAI).
- **Local CA Firms:** Contact local CA firms directly and discuss your requirements and budget.
### 2. **Exemption of Medical Bills**
- **Medical Bills Exemption:**
- As a proprietor, medical expenses are generally considered personal expenses and are not allowed as a deduction under business income.
- However, if you have a health insurance policy for your employees and it is paid out of the business, it can be claimed as a business expense.
### 3. **TDS Deducted by Clients**
- **TDS Under Section 194J:**
- If your clients are deducting TDS at 10%, this generally falls under **Section 194J**, which pertains to payments for professional or technical services.
- **Audit Requirement in Relation to TDS:**
- The requirement for audit is based on the gross receipts threshold mentioned earlier (Rs. 1 crore), not directly on TDS.
### 4. **Service Tax Registration for Multiple Services**
- **Service Tax Registration Categories:**
- For your friend starting a company offering multiple services, he should register under the relevant service categories provided by the Service Tax department. These might include:
- **Manpower Recruitment Agency**
- **Overseas Education Consultancy**
- **Travel Agent Services**
- **Immigration Consultancy Services**
- **Single Registration for Multiple Services:**
- It is possible to obtain a single service tax registration and cover multiple services under the same registration by specifying all applicable service categories.
- The service tax registration can be updated later if the scope of services changes or expands. You can add or modify service categories by updating the registration details with the tax authorities.
### **Summary and Recommendations:**
1. **Audit Requirement:**
- Yes, you need to get your books audited since your gross receipts exceed Rs. 1 crore.
- Find an auditor in Mumbai via referrals, online directories, or local CA firms.
2. **Medical Bills Exemption:**
- Personal medical bills are not deductible as business expenses, but health insurance for employees is.
3. **TDS Deduction:**
- Clients deducting TDS at 10% fall under Section 194J for professional services.
4. **Service Tax Registration:**
- Register under specific categories relevant to the services offered. A single registration can cover multiple services, and updates can be made as needed.
For comprehensive advice and compliance, consulting with a tax advisor or accountant is highly recommended.
#### **Audit Requirement for Financial Year 2010-11:**
- **Threshold for Audit:**
- As per the Income Tax Act, 1961, if your gross receipts exceed **Rs. 1 crore** in a financial year, you are required to get your books of accounts audited under Section 44AB.
- Since your expected gross receipts are more than Rs. 20 lakhs, you fall well within the threshold for mandatory audit. Therefore, you need to have your books audited.
- **Finding an Auditor:**
- To find a good auditor in Mumbai, you can consider:
- **Referrals:** Ask for recommendations from other business owners or professional networks.
- **Online Listings:** Check directories of Chartered Accountants (CAs) or professional organizations like the Institute of Chartered Accountants of India (ICAI).
- **Local CA Firms:** Contact local CA firms directly and discuss your requirements and budget.
### 2. **Exemption of Medical Bills**
- **Medical Bills Exemption:**
- As a proprietor, medical expenses are generally considered personal expenses and are not allowed as a deduction under business income.
- However, if you have a health insurance policy for your employees and it is paid out of the business, it can be claimed as a business expense.
### 3. **TDS Deducted by Clients**
- **TDS Under Section 194J:**
- If your clients are deducting TDS at 10%, this generally falls under **Section 194J**, which pertains to payments for professional or technical services.
- **Audit Requirement in Relation to TDS:**
- The requirement for audit is based on the gross receipts threshold mentioned earlier (Rs. 1 crore), not directly on TDS.
### 4. **Service Tax Registration for Multiple Services**
- **Service Tax Registration Categories:**
- For your friend starting a company offering multiple services, he should register under the relevant service categories provided by the Service Tax department. These might include:
- **Manpower Recruitment Agency**
- **Overseas Education Consultancy**
- **Travel Agent Services**
- **Immigration Consultancy Services**
- **Single Registration for Multiple Services:**
- It is possible to obtain a single service tax registration and cover multiple services under the same registration by specifying all applicable service categories.
- The service tax registration can be updated later if the scope of services changes or expands. You can add or modify service categories by updating the registration details with the tax authorities.
### **Summary and Recommendations:**
1. **Audit Requirement:**
- Yes, you need to get your books audited since your gross receipts exceed Rs. 1 crore.
- Find an auditor in Mumbai via referrals, online directories, or local CA firms.
2. **Medical Bills Exemption:**
- Personal medical bills are not deductible as business expenses, but health insurance for employees is.
3. **TDS Deduction:**
- Clients deducting TDS at 10% fall under Section 194J for professional services.
4. **Service Tax Registration:**
- Register under specific categories relevant to the services offered. A single registration can cover multiple services, and updates can be made as needed.
For comprehensive advice and compliance, consulting with a tax advisor or accountant is highly recommended.
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