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Please help - urgent!!!

rachit arora (Transfer Pricing Professional) (167 Points)

07 July 2014

I am a lawyer working in a law firm. I am receiving professional fee from my employer.

Whether I should file ITR4?

Can i claim expenses like travelling, photocopying, telephone etc? If yes, do i need to maintain books of accounts?

My annual income is INR 4,80,000

Kindly advise.

Thanks in anticipation!!!

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5 Replies

Debojit (Student CA Final) (308 Points)
Replied 07 July 2014

Hello Rachit,

You'll have to file ITR-IV if you are showing such income as professional income. And for claiming the corresponding expenses, you'll have to submit details of your books of accounts.

But if you are employed in a law firm on a full time basis, then you should be getting salary and not professional fee. If that's the case, then you'll need to file ITR-1.

Hope this helps!!!

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rachit arora (Transfer Pricing Professional) (167 Points)
Replied 07 July 2014

Thanks Debojit!!!

I am employeed on a professional fee basis. Every month i pay TDS @ 10% from professional fee received. I wanted to know what kind of expenses i can claim in my ITR as i have not maintained any books of accounts?

Thanks in anticipation!!!

Debojit (Student CA Final) (308 Points)
Replied 07 July 2014

Rachit, it is compulsory for you to maintain books of accounts if you fulfil the conditions u/s 44AA of the Income tax act.

Summary of 44AA:

Category	Applicable Persons	Books to be maintained
Cat “A”	Specified Professions- Gross Receipts does not exceed Rs.1,50,000 in any of the 3 preceding years	Such books of accounts as may enable the AO to compute the total income. No books prescribed.
Cat “B”	Specified Professions- Gross Receipts exceed Rs.1,50,000 in all the 3 preceding years	Books as prescribed in Rule 6F to be maintained.
Cat “C”	Non Specified profession or business- if income does not exceed Rs. 1,20,000 AND the total turnover does not exceed Rs.1 0,00,000 in ALL the 3 preceding years.	No need to maintain any books.
Cat “D”	Non Specified profession or business- if income exceeds Rs. 1,20,000 OR the total sales, turnover or gross receipts exceed Rs.10,00,000 in any of the 3 preceding years. And also includes assesses covered u/s 44AD and 44AE.	No books prescribed by the board. But should maintain the books so as to enable the AO to compute the total income.

A Specified professional is-

Every person carrying on legal, medical, engineering or architectural profession, or profession of accountancy or technical consultancy or interior decoration.

So going as per law, you are required to maintain such books that help the Assessing Officer to determine your income. It is mandatory. I would suggest you prepare the books, it wouldn't take much time. Just give an account of all receipts and expenses & then file ITR-4.

rachit arora (Transfer Pricing Professional) (167 Points)
Replied 07 July 2014

Thanks a ton!!!

I want to claim expenses like travel, stationary, etc. What account/bills to be maintained?

Please advise

Thanks in anticipation!!!

Debojit (Student CA Final) (308 Points)
Replied 07 July 2014

Just maintain a cash book and ledger.

Also, maintain a file of all the bills and expenses that you are claiming as deductions. Expenses must be related to the professional services offered by you.