Income from hiring
This query is : Resolved
Saurabh Garg
(Querist)
13 September 2010
Assesse is a trader & has a turnover of Rs. around 50-55 lacs. Apart from this he has 2 vehicles which he is hiring on rent, in such a case how to charge depreciation in respect of that asset & is sec. 44 E has to be considered...?
Please guide...
Please guide...
Shudhanshu Agrawal
(Expert)
13 September 2010
For hiring business he has two options
1- Either to go for preassumptive basis as per section 44E; or
2- Maintain the books as per section 44AA and then calculated PGBP.
If he obtain for 1st option no other deduction in PGBP will be allowed. However, if he adopt option 2 then he can claim depreciation.
1- Either to go for preassumptive basis as per section 44E; or
2- Maintain the books as per section 44AA and then calculated PGBP.
If he obtain for 1st option no other deduction in PGBP will be allowed. However, if he adopt option 2 then he can claim depreciation.
Saurabh Garg
(Querist)
13 September 2010
Sir, he has just 2 vehicle which he has running on hire. Other wise he is a trader in goods in that case, what to do...?
Saurabh Garg
(Querist)
13 September 2010
Plz.. guide...
Shudhanshu Agrawal
(Expert)
13 September 2010
Then he can show it under section 44E.
Saurabh Garg
(Querist)
13 September 2010
What about depreciation..?
And is only 3500 per myn has to be considered as income or we can show more income..?
And is only 3500 per myn has to be considered as income or we can show more income..?
13 September 2010
the assessee being subject to tax audit and having income from 2 sources one from trading activity and another from incidental business of carrying out hiring activity (both falls under business income)i suggest let the income from both the sources be shown in the P & L account.claim depreciation on the vehicles owned.
14 September 2010
agreed with CA.Mini, It is better to shown as incidential business and claim deprecaiton and other expenses, by which he can claim maximum deduction of expenses.
Saurabh Garg
(Querist)
14 September 2010
Any other optionss plzzz..
CMA Arif Farooqui
(Expert)
14 September 2010
above discussed are only available option under given condition.
i am agreed with CA Mani & Bijender.
i am agreed with CA Mani & Bijender.
Shudhanshu Agrawal
(Expert)
15 September 2010
Dear Saurabh,
You can opt for the suggestions given by CA Mini, CA Bijender. But the problem may arise when there will be indirect taxation provisions which can increase the complications. As the trader is having good turnover then VAT, CST etc, as the case may be, will be applicable.
As the amount is very small, according to me it is better to consider it in Section 44E.
You can opt for the suggestions given by CA Mini, CA Bijender. But the problem may arise when there will be indirect taxation provisions which can increase the complications. As the trader is having good turnover then VAT, CST etc, as the case may be, will be applicable.
As the amount is very small, according to me it is better to consider it in Section 44E.
16 September 2010
IN case of incidential business, there is no problem of VAT , CST , in case of hiring , you have to register yourself in Service tax only if you exceed the exemption limit of 10 Lac.
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