Purchase of amway products and direct sales of the same

This query is : Resolved

Guest

Guest (Querist)

27 July 2011 Dear Friends / Experts,

A, a salaried individual has been given identification as a Business Owner by AMWAY.

Query

A has made some purchases for a sum of say Rs.20000/- for doing direct sales.

A has sold only for a sum of Rs.10000/- with a profit of Rs.1500/-.

As A could not continue direct sales, A has retained the balance products for his personal use.

How A can treat this profit of Rs.1500/- in the income tax return and which form should be used.

Ans : ..............

I shall wait for your reply.

Thanks.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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27 July 2011 Sir, Rs, 1,500/- may be treated under PGBP. Pl file ITR-4S by opting section 44AD.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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27 July 2011 You can show the profit as business income and the unsold stock should be debited to the capital account or can be retained in closing stock.

As regards sales of 10,000 you can file return u/s 44AD by showing profit @ 8% on 10,000/-

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