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Tax Computation urgent plz reply soon

Nikhila (ca final student) (187 Points)

15 August 2010

my brother's annual income for financial year 2009-10 salary is Rs277867 and savings in LIC - Rs 15300

he pays a monthly rent of Rs 3000/- and conveyance charges amount to Rs 2500 Per month

actually my brother is getting his salary from a consultancy so they have issued a from 16A u/s 194J instead of Form 16

i.e for salaries u/s-192B - TDS Amount is Rs - 27973

My confusion is whether the income must be shown as salary or from business or profession

plz compute the income tax for above given details and suggest me how to show the income which form to be filled ITR 4 or Saral II

if ITR 4 has to be Filled plz let me any one if possible fill it and send me please help dont mind because i m confused i m not understanding how to fill it

My mail ID is nikhila.nikhila.vishwanath @ gmail.com

Please friends help me

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10 Replies

CA.SKR (CA; CS-Final (One Group); DISA (ICAI); Insolvency Professional) (442 Points)
Replied 15 August 2010

Since your brother got Form - 16A, hence the income will not be taxable as Salary income. It will be taxable under the head Business & Profession. ITR Form 4 will be applicable.

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Nikhila (ca final student) (187 Points)
Replied 15 August 2010

k but how to show that income as business& profession income we need to prepare profit & loss account & balance sheet na for that he is not carriying on busineess so no assets nor liability so how to show that income

CA.SKR (CA; CS-Final (One Group); DISA (ICAI); Insolvency Professional) (442 Points)
Replied 15 August 2010

Profit & Loss A/c and Balance Sheet is to be prepared. Whatever gross amount is shown in Form - 16A, show it as income in P&L A/c, show various expenditure like conveyance, telephone, printing & stationery etc. as expenses in P&L A/c.

Similarly Balance Sheet is also to be prepared. If he is having any movable property i.e. Bike / Car, Mobile phone handset, computer etc., show them as fixed assets in BS and charges depreciation on them. If any amount is due from the consulting firm to your brother, that amount is to be shown as Sundry Debtors. Cash and Bank balances of business / profession are also to be shown as current assets in BS.

Maintain books of Accounts i.e. cash book, ledger etc. P&L and BS details are to be reported in ITR. Better consult some of your experienced friend personally for keeping books of A/c and for making P&L and BS.

1 Like

Pankaj Gulati (Tax Advisor) (81 Points)
Replied 15 August 2010

I agree with Mr. Satendra.

CMA K SIVA KUMAR (Jr. Executive (Accounts)) (79 Points)
Replied 16 August 2010

i agree with satendarkumar sir

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princy (final student) (31 Points)
Replied 16 August 2010

hi ! since the gross receipts are below the limit u need not mantain the entire books of accounts. therz another clause in the ITR 4 namely " when regular books of accounts are not maintained ". here u have to just enter the amt of gross receipts , expenses , bank / cash balance and debtors , creditors if any.

hope this may help u.

CA. BIJENDER KR. BANSAL (ACA, B.COM) (8148 Points)
Replied 16 August 2010

Agreed With experts.

Receipt as professioanl charges will be taxable as business income and you can claim expense against it by making a simple working on a paper.

Gross Receipt xxxxxxxxxxxx

Less:

Coveyance Exp xx

Buiness Promotion xx

Office rent xxx

Office Maintianance xxxx

Misll Exp xxxx

Dep on FA like Computer etc if any xxx

Net Income xxxx

by making this summary you will get net income which may be below less than exemption limit and claim refund of tds.

1 Like

Nikhila (ca final student) (187 Points)
Replied 16 August 2010

oh thank u CA.Satendar Kumar ,SIVA KUMAR & princy

abhishek (Job) (132 Points)
Replied 17 August 2010

I agree with Mr. Satendra.

Rishab (A.C.A.) (155 Points)
Replied 17 August 2010

i don't agree with princy, you are required to maintain Books of Accounts.

See Maintenance of accounts by certain persons carrying on profession or business.

Section 44AA(2): Every person carrying on business or profession [not being a profession referred to in sub-section (1)] shall -

(i) if his income from business or profession exceeds [one lakh twenty] thousand rupees or his total sales, turnover or gross receipts, as the case may be, in business or profession exceed or exceeds [ten lakh] rupees in any one of the three years immediately preceding the previous year; or

(ii) where the business or profession is newly set up in any previous year, if his income from business or profession is likely to exceed [one lakh twenty] thousand rupees or his total sales, turnover or gross receipts, as the case may be, in business or profession are or is likely to exceed [ten lakh] rupees, [during such previous year; or

(iii) where the profits and gains from the business are deemed to be the profits and gains of the assessee under [section 44AD or section 44AE or section 44AF] [or section 44BB or section 44BBB], as the case may be, and the assessee has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, during such [previous year,]]

keep and maintain such books of account and other documents as may enable the [Assessing] Officer to compute his total income in accordance with the provisions of this Act.