Commision U/S.194H and Account Maintining

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This discussion clarifies that commission income received under Section 194H is not eligible for presumptive assessment under Section 44AD. Therefore, the client must prepare a Profit and Loss account and a Balance Sheet. It is advisable to deduct expenses incurred in earning this commission to accurately reflect taxable income.

Mahabir Prasad Agarwal

Mahabir Prasad Agarwal (Querist)
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03 October 2021 One of my client has received Rs. 4.08 lac as commission U/S. 194H and ITDS is 15,306/-. Whether my client can declare his income U/S.44AD ? Or he will have to prepare Profit and Loss a/c and Balance shet ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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03 October 2021 No. For commission income presumptive assessment u/s. 44AD not eligible. He has to prepare P&L account with BS & submit ITR under normal assessment.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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03 October 2021 44AD not applicable for commission income. BS and p and l required to be filled.

Mahabir Prasad Agarwal

Mahabir Prasad Agarwal (Querist)
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03 October 2021 Sir, if my client want to show entire commission as taxable income, then also, the same rule will stand i.e.P/L a/c and Balance Sheet ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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03 October 2021 There is no other option. It is better to deduct expenses which were spent for earning the commission income. Some details in the P&L and BS is mandatory.

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