Audit: Professional Income to Business Income
This query is : Resolved
Quick Summary
Rahul Singh
(Querist)
09 November 2020
Dear All,
In my last to last financial year ITR filing, my other CA added my category as Professional for which reason I had to get Audit done. But my category is Business I think, because I'm running a proprietorship Services based business. This Audit thing has became an issue as that means I have to pay extra fees, extra maintenance of books, etc.
So how can I get this changed at least for current year? Because I've heard Business Income auditing slab is much higher.
Please tell, if audit actually gives benefit in prospect? e.g. IT Department, Loans, etc.
Thanks
In my last to last financial year ITR filing, my other CA added my category as Professional for which reason I had to get Audit done. But my category is Business I think, because I'm running a proprietorship Services based business. This Audit thing has became an issue as that means I have to pay extra fees, extra maintenance of books, etc.
So how can I get this changed at least for current year? Because I've heard Business Income auditing slab is much higher.
Please tell, if audit actually gives benefit in prospect? e.g. IT Department, Loans, etc.
Thanks
CA R SEETHARAMAN
(Expert)
09 November 2020
What are the nature of services provided by you.
Rahul Singh
(Querist)
09 November 2020
Dear CA R SEETHARAMAN,
It's IT Services only.
It's IT Services only.
CA R SEETHARAMAN
(Expert)
09 November 2020
It's only professional income only if you are providing IT services. It will not fall under business income.
Rahul Singh
(Querist)
09 November 2020
But I was told that it can be shown in Business and it's my choice, so can you please re-check for this? Is it really mandatory for IT Services (proprietorship business) to fall under Professional Income?
CA R SEETHARAMAN
(Expert)
09 November 2020
Confirm yourself alone is providing services or employing somebody and providing services.
Rahul Singh
(Querist)
09 November 2020
Dear CA R SEETHARAMAN,
Sorry didn't understood. But I'm absolutely employing people and providing IT services, so what can be done in this case? Because I think as per ITR I look like a Freelancer, though I'm running a business.
Sorry didn't understood. But I'm absolutely employing people and providing IT services, so what can be done in this case? Because I think as per ITR I look like a Freelancer, though I'm running a business.
CA R SEETHARAMAN
(Expert)
09 November 2020
In such a case it will be considered as business as you are employing people and not a freelancer.
Rahul Singh
(Querist)
10 November 2020
Thanks for the clarification. So how can we change this while filing ITR for this current financial year after March 2021? Anything special needs to be done or what should I do?
CA R SEETHARAMAN
(Expert)
10 November 2020
Yes, change while filing ITR, no need for anything.
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