Income tax computation for professional fee

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 October 2013 I am medical professional in govt. job. I took up some professional assignment after taking approval from the competent authorities. Approval was granted with the clause that 30% of professional fee should be deposited to the institute.
Now, the sponsoring organisation shall pay the fee after 10% TDS deduction.
If I was to receive an amount of Rs 100000, then how will the tax computation be done:
1. (100000-10% TDS) - 30% of the balance( 27000) to the organisation.
2. (100000-30% to the organisation, means 30000).

AND how should the final tax calculation be done, if I am in 30% bracket:
Option 1: As I will receive only Rs 73000 ( after deducting 10% TDS) . So my total tax implication should be RS 21900 ( 30% of 73000) and as I would have paid 10000 as TDS I will need to pay additional 11900 as tax.

Option 2: My tax will be calculated on 70000. Means 21000. And As I would have paid 10000 as TDS, I will need to pay additional 11000. as tax

Option 3> My tax will be calculated on 100000. of this 30000 will go as tax and another 30000 as payment to the organisation.
Pl advise

Nikhil Kaushik

Nikhil Kaushik (Expert)
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16 October 2013 Your Income is Rs 1,00,000

Your expense: Rs 30,000

tax: @ 30.90% on 70,000

ie 21,630

Less: TDS: Rs 10,000

Add tax payale: Rs 11,630

However, please note that you can claim other expenses, if any, against this income such as traveling expense, telephone expenses, stationery, meals, etc etc incurred in relation to this assignment. That shall reduce your tax liability.

Querist : Anonymous

Querist : Anonymous (Querist)

16 October 2013 Thanks. Do we need vouchers for these other expenses? I had indeed incurred such expense but generally there is no vouchers for the same.

Querist : Anonymous

Querist : Anonymous (Querist)

16 October 2013 Thanks. Do we need vouchers for these other expenses? I had indeed incurred such expense but generally there is no vouchers for the same.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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16 October 2013 it would be great if you have vouchers. However, certain expenses are often without vouchers such as taxi fare etc. As long as such expenses charged are reasonable, they may allowed.

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