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Income Tax really Really Urgent!!

CA. Anshul Bajaj (Taxation Head) (173 Points)

15 January 2010

Dear Friends,

PLEASE HELP ITS REALLY URGENT

I want all of you to kindly give your comments and check the attached file of Income Tax Calcuilation of a person who can Withdraw money from a company in two ways either in salry or in consultancy charges Please friends Help... i have attached a excel file Of both the calculations please check whether all the rates and calculation are corect and kindly Guide me

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16 Replies

Jitendra Jhanwar (Officer) (129 Points)
Replied 15 January 2010

Dear Anshul,

Both Calculation are right.

In Second case(i.e. consultancy charges ) you can claim other expenses related to provide this service and reduce your tax liabilities.

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CA. Anshul Bajaj (Taxation Head) (173 Points)
Replied 15 January 2010

But sir Rates applied are correct or no

Amir (Learner) (4016 Points)
Replied 15 January 2010

Dear Brother,

Jitendra is rite but make sure of Service tax provisions, If this is the case of taxable service then u need to get registered as & when ur receipts crossses 9 lakhs + u have to pay service tax on receipts in excess of 10 Lacs for the first year & thereafter on entire receipts..

Jitendra Jhanwar (Officer) (129 Points)
Replied 15 January 2010

Dear Anshul

Yes, in both case rates are correct.

But in first case (i.e. Salary) you can also claim HRA if the person lives in rented house and reduce his tax liabilities.

CA. Anshul Bajaj (Taxation Head) (173 Points)
Replied 15 January 2010

Sir, Person have itsown house...Thankyou very much

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Nicky (Chartered Accountant) (245 Points)
Replied 15 January 2010

Dear Anshul,

Ur calculations seem to be spot on but ur sheet under the consultancy head also calls it Salary.

Dear Amir,

If it fixed rate of payment as it seems from his calculations no need to get registered for service tax apparently.

sanjay kumar ( tax consultant) (90 Points)
Replied 15 January 2010

IN THE COMPUTATION OF SALARY .... GROSS SALARY CONSTITUTES OF HRA ....WHICH IS SUBSTANTIAL ...IN YOUR COMPUTATION NO DEDUCTION ...TOWARDS THIS HAS BEEN MADE .....PLZ CONFIRM THE STATUS ....WHY NO DEDUCTION TOWARDS THIS HAS BEEN MADE .....

Amir (Learner) (4016 Points)
Replied 15 January 2010

Dear Sanjay,

Ansul has clarified above that the person is not paying any rent since he is residing in his own house...

Simple.

Aditya Maheshwari (CA in Practice) (35867 Points)
Replied 15 January 2010

Originally posted by : sanjay kumar
	IN THE COMPUTATION OF SALARY .... GROSS SALARY CONSTITUTES OF HRA ....WHICH IS SUBSTANTIAL ...IN YOUR COMPUTATION NO DEDUCTION ...TOWARDS THIS HAS BEEN MADE .....PLZ CONFIRM THE STATUS ....WHY NO DEDUCTION TOWARDS THIS HAS BEEN MADE .....

Since the person has is own house as posted earlier by the queriest

sanjay kumar ( tax consultant) (90 Points)
Replied 15 January 2010

IN CALCULATION OF TAX ON SALARY AND ARRIVING AT THE NET INCOME AFTER TAX ...ALL DEDUCTIONS BUT FOR HRA HAS BEEN MADE ...WHAT IS BEING OVERLOOKED HERE IS THAT ....THERE ARE SEVERAL EXPENSES THAT A PERSON INCURRES IN PROVIDING SERVICES IS ADMISSIBLE AND IT IS ONLY AFTER A FULL EFFECT TO THAT EXTENT IS GIVEN IT CONNOT BE JUSTIFIABLY SAID THAT AMONG THE TWO ..WHICH IS BENEFICIAL ....