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)

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)

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)

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)

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)

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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