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Specified profession for purpose of sec. 44aa (Income Tax)

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This query is : Resolved



( Author )
15 March 2012

Dear Member

One of the my friend is working with MNC company and she has received Salary of Rs.6.00 Lacs during F.Y. 2010-11 as professional Fees. Also company has deduct TDS @ 10% u/s. 194J.

So pls. let me know whether this income will cover under Specified Profession or Non Specified Profession and Have to maintain Books of Account or Not as per Sec.44AA.

Thx in advance

Priyanka


Dintakurthi Tirumala

( Expert )
15 March 2012

You are saying your friend receiving salary then it is liable for TDS under section 192 even though her service is professional service because employer and employee relation ship exists. If fee received for providing her service like certifying of project reports, filing of income tax returns, issue of audit reports,filing of service tax returns etc.... what may be then it is called professional fee and liable to deduct TDS under section 194J. For the above case no need to maintain books as per section 44AA for the later case need to maintain of books as per section 44AA. First you confirm there is employer and employee relationship exists then it is salary and TDS would be deduct under section 192 and no need to maintain books otherwise deduction of TDS under section 194J is correct and require to maintain books and her income is liable to tax under the Head Income from Business/Profession.
OM SAI SRI SAI JAI JAI SAI


Priyanka

( Author )
15 March 2012

Sir, it is MNC company, every employoees getting Salary in the form of Professional Fees by deducting 10% TDS u/s.194J. No one on the payroll of the company. For E.g. in above case she is earning 50 K per month. Now company is paying 45 K after deducting TDS @10% u/s.194J and at the end of the quarter company will issue form 16A.

Pls. confirm still books of account need to be maintaine.


Dintakurthi Tirumala

( Expert )
15 March 2012

Then the receipt is not salary it is professional fee so deduction of the TDS under section 194J is correct and she require to maintain books as per section 44AA and liable to tax under the Head income from Business/Professional.
OM SAI SRI SAI JAI JAI SAI


Priyanka

( Author )
15 March 2012

Sir, would pls. guide me in this case which type of expenses and deduction can be consider at time of calculating Tax liability.

Thx in advance


Dintakurthi Tirumala

( Expert )
15 March 2012

As per your explanation basis she working in the company that means she doesn't have any special office. So any type of expenses she didn't met like rent,electricity charges,phone bill,sadar,salaries etc... but i think she can claim traveling expenses which met by her to came to her office i mean she working company from her house because she met such expense to earn such income and telephone expenses also possible to get deduction if she uses her personal phone to contact company's customers. All expenses which met by her earned income which are related to earning of such income she can claim as expenditure at type of arriving of income for tax purpose I think however you know about the Chapter VIA deductions. If you required any further clarification please write full details about her like nature of work, to meet such work what actions she taking by paying some amount from her own income etc...
OM SAI SRI SAI JAI JAI SAI


Priyanka

( Author )
16 March 2012

Sir, Thx for reply. She is working as PA to Director.


Dintakurthi Tirumala

( Expert )
16 March 2012

Then she has only traveling expenses paid from her house to the Company office as deduction.If such facility also provided by the company then no expenses to her.
OM SAI SRI SAI JAI JAI SAI


Priyanka

( Author )
19 March 2012

Thank you sir


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