Ashish (Professional) (117 Points)
23 February 2011For a businessman or professional if he/she deducting some expenses from the total income then he/she must required the bills of the expenses incurred.
I heared from people that you can claim 30-40% expenses from total income without any need to show any bills. For claiming the expenses more than this, you need the bills.
Please throw some light, what is the right method...?
RAKESH
(Almost CA)
(2199 Points)
Replied 23 February 2011
Right Method is that the expenses claimed should correspond to the income earned. If at all u want to claim some expenses u should produce the bills on when ur case is selected for scrutiny otherwise u can escape the wrath of the Income tax. So it a risk
Ashish
(Professional)
(117 Points)
Replied 23 February 2011
Rakesh, you are right but still there is some percentage which IT department also consider as genuine before asking for bills.
Suppose anyone earning 10lakh and showing 3 lakh as expenses, so this will consider as correspond to the income earned.
CAclubindia
