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How to pay income tax by a taxi driver

sujit naha (accountant) (350 Points)

21 February 2017

Status : Individual

Profession : Taxi Driving on Hire basis

Source of Income : Taxi Fare from Passengers

Yearly Income : approx 4.00 Lakhs

Queries : Want to pay Income tax on earning of Taxi Fare of Rs. 4.00 lakhs per year.

Question: There is no provision to submit of documents of taxi fare income to Income Tax Dept. So how to pay Income tax on said 4.00 lakhs and how to submit Income Tax Return where there No Source of Income Evidence ..

Please clarify in details....... Thanks

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4 Replies

Sanjay S (Chartered Accountant) (1375 Points)
Replied 21 February 2017

You could go for presumptive taxation u/s 44AD since you are not having any books of accounts nor any evidence of income. The activity of driving taxi on hire basis is a business that gets covered under section 44AD.

In that case, you may have to pay tax on 8% of your Gross receipts received/ receivable during the year & you dont have to maintain any records for the taxi income.

If the 4Lakhs mentioned above was your gross receipts, then the assessee may have to disclose 32,000 (ie., 8% of 4 Lakhs) as his/her income. Eventually the assessee could file a NIL income tax return under ITR-4S, provided the (8% amount + other income) does not exceed basic exemption limits.

If the 4 Lakhs mentioned was your profits (Taxi income - Expenses), then you may have to get the figure of total TAXI Income received during the year. The 8% of such income would be deemed to be your income. The assessee may file a return after including his/her other sources of income.

(Other views & suggestions are invited)

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(Guest)

SHOW PROFIT MORE THAN 8% AND PREPARE PROFIT AND LOST A/C AND BS

U CAN FILL RETURN AS PER 44 AD BUT PROFIT SHOULD JUSTIFY YOUR INVESEMNTS

AND HIGH PURCHASE IT SHOULD NOT MORE THAN YOUR PROFIT

Gaurav Bhuptani (Final ca) (27 Points)
Replied 09 July 2018

What would be the nature of business for the ola cab driver for the purpose of filing ITR 4 for AY 2018-19 and as such they are not maintaining the books of accounts the details asked regarding sundry creditors sundry debotrs inventory and cash balance will be nil???

kindly revert back soon

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