About professional receipts for 44ab for the a y-2017-18

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 March 2017 Gross Professional Receipts from Abroad of Rs. 45,80,694
192 Salary of Rs 2,90,287
Bank FD Interest of Rs 6,25,180
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Total of Rs 54,96,161
Please give me suggestion either TAX AUDIT have to Made or Normal Business Returns have to file. Please give the suggistion sir

CA Gopal Somani

CA Gopal Somani (Expert)
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09 March 2017 As per the provisions of section 44AB of the Act every person carrying on a profession is required to get his accounts audited if the total gross receipts in a previous year exceed fifty lakh rupees.

As you have mentioned that your professional receipt is 45 Lakhs only, I don't think tax audit will be required. Salary will be included under 'Salary'head (not part of Gross Receipt) and Income from FD interest will be included in Other Sources.

Interest Income is either assessed as 'Business Income' or as 'Income from other sources' depending upon the activities carried on by the assessee. If the investment yielding interest is part of the business of the assessee (Money lending), the same would be assessable as 'business income' but where the earning of the interest income is incidental to and not the direct outcome of the business carried on by the assessee, the same is assessable as 'Income from other sources'. Business implies some real, substantial and systematic or organized course of activity with a profit motive. Interest, generated from such an activity, is business Income; else it would be income from other sources.

More suggestions are welcomed.

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