calculation of tax
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
06 December 2009
For civil contractors, if their turnover is less than 40 lakhs, 8% on the gross receipts can be taken for calculation as income for calculation of Income tax. From 2009-10 F.Y. is the scheme extended for all commission agents, wherein they can calculate @ 8% on gross commissions received. Kindly guide.
06 December 2009
Commission agent does not come into the category of either business defined in Section 2(13) nor it is a profession u/s 2(36).
To understand the provisions -
Generally; commission agents receive 2% of turnover. To allow 92% as expenditure is not justifiable.
If they are maintaining their books of account as Pucca Aratia i.e. all the turnover showing in their name; then also they will not be able to show profit @ 8% before their gross commission is around 2%(supra).
Since no sale-purchase and consumption of material is there; hence these are not covered either in deeming provisions of 5% net profit in case of retail trade or 8% net profit of total turnover in case of contractor.
Hence you cannot claim 8% or 5% as net profit in case of commission agents.
CA Rakhecha, Surat
To understand the provisions -
Generally; commission agents receive 2% of turnover. To allow 92% as expenditure is not justifiable.
If they are maintaining their books of account as Pucca Aratia i.e. all the turnover showing in their name; then also they will not be able to show profit @ 8% before their gross commission is around 2%(supra).
Since no sale-purchase and consumption of material is there; hence these are not covered either in deeming provisions of 5% net profit in case of retail trade or 8% net profit of total turnover in case of contractor.
Hence you cannot claim 8% or 5% as net profit in case of commission agents.
CA Rakhecha, Surat
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