How much amount can be refunded

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This query is : Resolved

Jitin Sethi (Querist)

09 January 2012 Sir, one of my client receives commission of Rs. 1700000/- and t.d.s has been deducted Rs. 170000/-. how much amount can he refund what are the rules plz describe. thanking you

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

09 January 2012 It depends upon the fact that how much business expenditure has been incurred by the assessee to earn this commission. You may consider all the legitimate business expenditure including vehicle expenses, office expenses , depreciation, staff salary etc...etc...
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Prepare Income & Expenditure A/c and show reasonable income. U/Section 44AD even 8% income is accepted and almost the whole TDS amount may be received as refund but please do not go through this short cut.
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In case of commission earners TDS is deducted but a major portion of the income remains unpaid. It remains credited in the books of the payer till 31.03.2011 generally. It is very difficult to prove in such cases that the assessee earns only 8%.
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There is no general rule as such. If there is no major expenditure incurred by the assessee , in spite of getting refund , the assessee may be made liable to pay tax also in such cases.
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So decide yourself after visualising all the details.

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