income tax

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

07 July 2010 a insurance agent having not books of account. how can determine his income. if his commission made in F.Y. 2009-2010 is Rs. 4 Lacs.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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07 July 2010 Income can be subjectively determined by different persons in different manner.

1. Insurance Agent :

He will not like to pay tax and will like to
get refunded his whole TDS.

He is not bothered about determination of correct income as such.

2. Income Tax Authorities:

They will like to determine assessee's total income at higher side. They will be happy if TDS is adjusted against the demand which would have arise by either additions
made by them or additional income declared by assessee from other sources.

3. Tax Consultant (like you/me/or all of us)

Tax Consultant will take the whole burden in spite of asking the Agent to maintain the details of his business expenditures also.

If you are under the last category then-

1. You have to Prepare his Income & Exp. A/c crediting it by Commission Income and debiting it by legitimate business expenditures like Conveyance Exp, Telphone Expenses etc.

2. Adjust the Net Income at your desired level by making suitable adjustments in expenses.

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