Rates of income tax for individual proprietor

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This query is : Resolved

Ashoka G (Querist)

15 December 2016 Dear Sir,

If the individual person doing business in his own capacity and earns profits, will the profit earned by individual be taxed at the normal slab rates specified for Individuals.

Sandeep Dharar

Sandeep Dharar (Expert)

15 December 2016 If the Individual is doing business as proprietor then the income of the individual(other than proprietorship business) and of the proprietor concern will b clubbed and taxed together.

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Ashoka G

Ashoka G (Querist)

15 December 2016 Sir thanks for your reply

Sandeep Dharar

Sandeep Dharar (Expert)

15 December 2016 U r welcome ashoka. U can show ur appreciation by hitting the like button if u like my reply.

Ashoka G

Ashoka G (Querist)

15 December 2016 Sir. I need another clarification. My friends would like to start a trading business like selling household items. They wanted to get in to a partnership agreement. As per estimate, their yearly profit could be around 3 lakhs. In my opinion, the income tax rate shall be flat 30℅ even if they earn profit of 10000 rupees. To avoid that I have suggested them to create a firm in individual form and have informed to create agreement for fixed ℅ of profit on sale for each additional person with some fixed amount of salary. Will this opinion becomes tax saving benefit to them and will there be any issues for raising agreement for fixed ℅ of commission on sale with respect to income tax.