I. tax computation

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Avinash (Querist)

31 July 2013 Greeting to all,
An individual has income from salary Rs.5,60,000/- as well as one inocme of Rs. 40000/- by doing some contract work with a company for which company has deducted TDS @1% u/s. 194C.

If I consider 40000/- as other sources I will have to pay self assessment tax @19%(20%-1%) on 40000/- with applicable cess & interest.
My question is
Could I consider this as presumtive income so that my taxable income will be 8% of 40000/-.
How I can reduce my tax liablity & which form should be used.

Thanking You,
Avinash

CA Parul Saxena

CA Parul Saxena (Expert)

31 July 2013 if your work lies under the specific section of presumptive income then only you may compute income as per rate applicable to presumptive exemption.
If your income does not lie under presumptive income then you are supposed to show the income and pay the tax.
If shown as Income from other sources-ITR 1
If shown as Business income-ITR-2
As per my opinion you should show the income as business income

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