Hello friends!!!
Well i am confused regarding the treatment of Tax rate of proprietorship. Is it the one following partnership rate or based on an Individual slab. Plz suggest...
5 Replies
Somebody
(IT Consultant)
(126 Points)
Replied 05 April 2008
income of a proprietory business is taxable in the hands of its proprietor, and the taxable income of an individual includes income from his/her proprietory business (also income under other heads) and obviously, taxed at the individual's rates.
Reetika Goel
(Qualified Chartered Accountant)
(565 Points)
Replied 06 April 2008
Under the Income Tax Act, 1956, the definition of Person is divided into seven parts:
Individual, HUF, Partnership Firm, Company, Local Authority, AOP/BOI, any other artificial juridical person.
Since partnership firm has been categorised seperately, its rate are defined under the act and is assessable independentaly.
But as far as proprietorship business is concerned, it is merely associated with an individual or you can say that is a source of income for an individual of which he will file return in his name by showing profit from that business.
So, proprietorship business is never assessed seperately rather individual carrying on that business is assessed and therefore, the slab of individual shall apply thereof.
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