Profession v/s business

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Querist : Anonymous

Querist : Anonymous (Querist)

27 June 2013 A photographer receives income from clients as his service charges. In which category it will be taxed. Income from profession or income from business?
And how much will be the Tax audit limit for FY ended 2011 and 2012?
Can he file return under presumptive taxation method?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

27 June 2013 In my view a photographer is receiving service charges from the clients due to his professional skills only and as such he should be treated as a professional.
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However, different stand may be taken for a person running a Photo Studio as he is not supposed to be paid of for merely for his photography. He is paid for the Photographs.
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So, it depends upon the nature of services
being rendered by a photographer
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Limit for tax audit for a professional : 15 Lakhs for the FY ended on 31st March 2011 and 2012.
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Querist : Anonymous

Querist : Anonymous (Querist)

27 June 2013 But in this case, he is a freelance photographer who shoots as per the clients requirements and comparatively highly paid.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

27 June 2013 Comparatively higher payments are made to a professional only. When the facts indicate that he is a professional photographer, we should not try to hide the same.
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Arguments may be given on the basis of Section 194J or Section 44AA, but these all are having their limitations. For example -When TDs is deducted of this person, under which Section it will be deducted?
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Querist : Anonymous

Querist : Anonymous (Querist)

27 June 2013 Ok Sir, Thank u.

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