Presumptive taxation and out of pocket expensces
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
19 January 2017
Benefit of Presumptive taxation is available for professional if gross professional receipt is less than 50 lakh.
Is out of pocket expenses are part of gross professional receipt ?
For example,
Say I am earning 45 lakh as professional fee and then I also incur other out of pocket expenses like air ticket/hotel/international travelling etc. This out of pocket expenses, I get reimbursed from client separately - say it is 8 lakh. No what should be the gross professional receipt in a year. it is 45 lakh or it is 45+8 = 53 lakh ?
Is out of pocket expenses are part of gross professional receipt ?
For example,
Say I am earning 45 lakh as professional fee and then I also incur other out of pocket expenses like air ticket/hotel/international travelling etc. This out of pocket expenses, I get reimbursed from client separately - say it is 8 lakh. No what should be the gross professional receipt in a year. it is 45 lakh or it is 45+8 = 53 lakh ?
19 January 2017
In my opinion out of pocket expenses reimbursed from client separately are not professional receipts since they are merely reimbursements. But having said that it may be important to show these expenses separately on bill and also bills or vouchers wherever applicable must also be kept and maintained so as to answer any query that may arise.
CA Suresh Jain
(Expert)
19 January 2017
So far presumptive tax u/s. 44ADA is concerned, the out of pocket expenses should be treated as part of Gross receipt
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