Advantages of filing taxes as business instead of personal

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John

None

26 Points Posted on 14 May 2014

I have a primary job but I do earn some extra money from some online work (content writing, blogging, advertising, consulting etc). Should I register a business and file personal and business income tax returns separately?

As of now, I am including my online revenue in my personal income while filing the annual returns. Is there any issues in deducting the expenses related to my online work in my personal tax returns? For example, I purchase certain products for the purpose of reviewing. I pay some money to other people to outsource some of my work and also to purchase various services and tools for my online work. Can I claim deductions for those expences if I file only personal income tax returns?

I think my online revenue is slowly growing. At what stage I am legally required to register a business?

Thanks in advance.

Replies (4)

Guest

The income you earn from job will be taxed under the head 'Salaries'.

The other income will be taxed as Business/ professional income.

Even if you legally register a business, the income earned from that will be taxed under your PAN Like how it is taxed now. (unless you want to start a ltd company/ partnership). The expenses that you incurr for earning business Income shall be deducted from your Business Income. You should maintain proper record of the income as well as expenses.

It is better to consult a CA/ tax consultant in your area and ask him to prepare a income and expenditure account and Balance sheet.

Mihir

Wealth Manager

5293 Points Posted on 14 May 2014

You can show both income in a single ITR. Expenses incurred to earn in your business can be claimed as deduction under the head income from business/profession. Maintain proper records for accounting and income tax purpose.