Dear Sir
one of our client render counselling service in india & abroad. He received icome for this from india & abroad and that exceeds 30 lakhs . whether he is taxable under head business income or profesional income & whether he is liable for tax audit ?
As per the provisions of section 4AB of the Income tax Act, 1961 every person carrying on profession shall if his gross receipts in profession exceed Rs. 15,00,000/- (from Asst Yr 2013-14) in any previous year get his accounts of such previous year audited.
The definition of the term profession as per section 2(36) is profession includes vocation.
The word profession implies professed attainments in special knowledge as distinguished from mere skill.
Special knowledge which is to be acquired only after patient study and application.
A profession is normally associated with the exercise of intellectual or technical equipment resulting from learning of service.
Profession involves occupation requiring purely intellectual and manual skill.
Many vocations may fall within the ordinary and accepted use of the word profession for instance as those of tax experts, financial accountants, cost accountants, management accountants, architects, engineers, journalists and so forth.
However, whether a person in any given case carries on a profession is a question of degree and always on facts.
In view of above, rendering of counseling service can be treated as a profession.
CAclubindia
