DEAR EXPERTS,
Firm is paying Salary to Accountant and treated as Salary Expenses and Can Accountant treat this Salary as Accounting Fees as Business Income in his Itr 4 ?
Kindly Reply
Thanks in Advance
Dipesh (Accountant) (42 Points)
13 August 2015DEAR EXPERTS,
Firm is paying Salary to Accountant and treated as Salary Expenses and Can Accountant treat this Salary as Accounting Fees as Business Income in his Itr 4 ?
Kindly Reply
Thanks in Advance
CMA Poornima Madhava
(CMA)
(13097 Points)
Replied 13 August 2015
It depends on terms of employment. If there is an employment agreement with the firm and if tax is deducted by source by the firm u/s 192, then the employee has to treat such income as salary and ITR1 can be used. But if there is no employment agreement and tax is deducted at source u/s 194J or if no tax is deducted at source, then it can be treated as professional income (not business income) and ITR4 can be used.
Vishal Goel
(Chartered Accountant)
(1688 Points)
Replied 13 August 2015
Hello
If firm treat it as salary then they will deduct tds u/s 192. It ll taxalbe in ur hand as salary income.
Rashi Bajaj
(CA)
(752 Points)
Replied 13 August 2015
Check the accountant's 26AS. If TDS was deducted u/s 192, then salary. If u/s 194J, then business income, If no TDS is deducted, treat it as business income as it would be more beneficial to him.
Dipesh
(Accountant)
(42 Points)
Replied 13 August 2015
NO TDS HAS BEEN DEDUCTED IN CURRENT YEAR ON SALARY. AND LAST YEAR RETURN SALARY SHOWN AS PROFESSIONAL FEES AND ITR 4 WAS FILED . WAS THAT TREATMENT CORRECT ? OR COMPULSORY I HAVE TO TREAT AS SALARY INCOME.
S. Shiroor
(Others)
(1207 Points)
Replied 13 August 2015
1] Scenario -I receipts greater than 10 lakhs
If the gross receipts are more than 10 lakhs in a year than service tax issue comes in. In that case file ITR2 .
2] Scenario -II receipts less than 10 lakhs no TDS cut under 194j but cut under 192
file ITR-1/2 depending upon receipts.
3] Scenario -III receipts less than 10 lakhs TDS cut under 194j .
file ITR-4
4] Scenario -IV receipts less than 10 lakhs No TDS cut .
You can prepare either which results in paying less taxes.
I hope that is clear.
Happy filing.
Ashok J
(CA Final)
(880 Points)
Replied 14 August 2015
Vishal Goel
(Chartered Accountant)
(1688 Points)
Replied 18 August 2015
Hello Shiroor.
1] Scenario -I receipts greater than 10 lakhs If the gross receipts are more than 10 lakhs in a year than service tax issue comes in. In that case file ITR2 .
Service tax salary income pe charge nai hota hai even if gross receipts are more than 10 lakhs… ..agar service tax charge ho raha hai to wo consultancy fees hai….
Service tax charge hoga ye decide karne se phele ye decide karna hoga gross receipt salary income hai ya consultancy fees …..
S. Shiroor
(Others)
(1207 Points)
Replied 18 August 2015
That is what I have said. If he files as ITR4 then he is treating the entire thing as Prof fees.
If entire remunaration receieved is treated as professional fees than service tax is applicable.
Then in that case filing ITR2 could be beneficial no question of ST.
Hope i am clear.
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