Need advice on how to show small business income on the ITR. the Income is earned by home tailoring on a small scale.
thanks!
2 Replies
sabyasachi mukherjee
(27579 Points)
Replied 26 July 2023
Pls post at admin @ easyaccountingaudittax.co.in
Nikita Agarwal
(Semi Qualified CA)
(3208 Points)
Replied 26 July 2023
Here are some steps and tips to help you show small business income on your ITR:
1. Maintain thorough records: Keep detailed records of all your business transactions, including income and expenses
2. Choose the appropriate form: businesses generally use the ITR-3 or ITR-4.
3. Calculate gross business income: Add up all the income you earned from your home tailoring business throughout the tax year. Deduct business expenses:
4. Deduct allowable business expenses from your gross income. Common expenses for a home tailoring business may include the cost of sewing materials, threads, needles, and other supplies. Additionally, you can deduct expenses related to the maintenance and operation of your sewing machine, such as electricity bills. Keep in mind that expenses must be legitimate and directly related to your business.
5. Consider home office deductions (if applicable): If you use a specific area of your home exclusively for your tailoring business, you may be eligible for a home office deduction. This deduction allows you to deduct a portion of your household expenses (e.g., rent, utilities, and property taxes) proportional to the size of your home office.
6. Report your net business income: After deducting business expenses from your gross income, you will arrive at your net business income. This is the amount you should report on the appropriate section of your tax form.
7. File your tax return.
8. Keep a copy of your tax return: Once you've filed your tax return, make sure to keep a copy of it, along with all supporting documents, for your records.
1. Maintain thorough records: Keep detailed records of all your business transactions, including income and expenses
2. Choose the appropriate form: businesses generally use the ITR-3 or ITR-4.
3. Calculate gross business income: Add up all the income you earned from your home tailoring business throughout the tax year. Deduct business expenses:
4. Deduct allowable business expenses from your gross income. Common expenses for a home tailoring business may include the cost of sewing materials, threads, needles, and other supplies. Additionally, you can deduct expenses related to the maintenance and operation of your sewing machine, such as electricity bills. Keep in mind that expenses must be legitimate and directly related to your business.
5. Consider home office deductions (if applicable): If you use a specific area of your home exclusively for your tailoring business, you may be eligible for a home office deduction. This deduction allows you to deduct a portion of your household expenses (e.g., rent, utilities, and property taxes) proportional to the size of your home office.
6. Report your net business income: After deducting business expenses from your gross income, you will arrive at your net business income. This is the amount you should report on the appropriate section of your tax form.
7. File your tax return.
8. Keep a copy of your tax return: Once you've filed your tax return, make sure to keep a copy of it, along with all supporting documents, for your records.
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