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Income from salary and profession

CA Rachit Gupta (Chartered Accountant) (1315 Points)

27 July 2014

Dear members A person having one time professional receipts of Rs.3,00,000 on which tds u/s 194J is deducted i.e. Rs.30,000. He has some expenses in rendering that service amounting Rs.2,50,000. The net income being Rs.50,000. He has salary income also of Rs.8,00,000 My query is : can he claim Rs.50,000 as other income and file ITR1 Or He has to show Rs.50,000 as professional income and file ITR4 Note: Profession is not covered under specified profession. Please give your valuable feedback. Thanks Rachit

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4 Replies

Mihir (Wealth Manager) (5293 Points)
Replied 27 July 2014

He will have to file ITR-4 so that he may claim expenses deduction, and then only Rs. 50,000/- will become taxable.

Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 28 July 2014

according to me you need to file itr 4, not because considering professional income under pgbp but considering it under other sources. show income of 300000 under other source and claim expenses of 250000... you need to keep proof for claiming expenses for any query by i.t. dept in future.

CA Rachit Gupta (Chartered Accountant) (1315 Points)
Replied 28 July 2014

Hello

If he claims Rs.50,000 as income from profession. Then tax become refundable as TDS is deducted on gross receipts of Rs.3,00,000

He is not required to prepare books of accounts.

If in future AO opens the case, then how can assessee justify that he claims an expenditure of Rs.2,50,000 as he is not required to prepare books of account.

Please suggest.

Thanks
Rachit

Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 29 July 2014

showing income under other sources will not require you to maintain books and you just need to keep proof of expenses incurred especially major expenses.