Hi, my query is a bit long and a mix. I hope this would be the correct category; else please move it to an appropiate category.
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Background: For a sole prop. having municipalty trade licence (shop & establishment) doing software development only for foreign customers/receives all payment by convertable money to INR. The person holds a masters degree in IT. The current accountant says his audit limit can not be 40L or 60L next yr, because it is not a business but a professional income, so the limit is 15L.
With an expected turnover going beyond 15L next year, what should be the future tax strategy.
1. Should he keep it as it now and go for audit when it's above 15L.
2. Should he make it a Partnership/LLP/Pvt. ltd etc.
3. If the licence is 'upgraded' to a 'business' - what would be the tax liablity and the 'practical liablity' like running after taxing stuff more frequently, reporting, or whatever else.
4. At 'street level'; will he save more money by auditing under 60L or auditing above 15L.
In general he is looking for a concrete 'money strategy' as the turnover grows.
Thank you in advance.
CAclubindia
