Return of hair saloon

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sanjay (Querist)
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20 August 2016 Sir
I have to file return of prop of hair saloon . What points I should consider for income generation. What type of exp should be taken? If I consider to file form 4S under presumptive income then p& Loss should be prepared or not?
What will be the proof of income and exp.?
Pl advise.

Regards

CA.Vinita Gupta

CA.Vinita Gupta (Expert)
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20 August 2016 Business income is any income that is realized as a result of business activity. Hair Cutting as well as any service that your Saloon is rendering will fall under the Business Income. Any expenditure incurred for the Business for eg: Rent, Tools of low value, salary payment to staff, pantry items etc you can claim as Business Expenditure.

If you choose to file Form 4S then your turnover should be less than 1 crore.
Your Net Income is estimated to be 8% of the gross receipts of your business.
You don't have to maintain books of accounts of this business.
You don't have to pay Advance Tax for such a business.
You are not allowed to deduct any business expenses against the income.

sanjay

sanjay (Querist)
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20 August 2016 My client is getting salary and the share in profit from the employer of the saloon, then what can be the income of my client and which form I should file? He is getting salary for Rs22000/- pm and share in profit, I don't know. Can we show his business income which he get as a share in profit? Pl confirm and advise.
Regards

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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21 July 2025 Thanks for sharing the details! Here’s how your client’s income and filing should be handled:

Income from Salary:
The monthly salary of Rs. 22,000 should be reported under ‘Income from Salary’ in the Income Tax Return (ITR).

Share in Profit from Saloon:
If your client is receiving a share in profits (like a partner’s share in partnership profits) from the saloon business, this is generally not taxable in the hands of the partner if it’s a genuine share of profits (not salary or commission).

But if this share is paid like a salary, commission, or any remuneration, it will be taxable as business income or salary accordingly.

Which ITR Form to File:

For salary income + share in profits from a partnership firm:
Your client should file ITR-1 (Sahaj) if only salary income and exempt share of profits.

If your client is carrying on business separately or getting remuneration from the business, then ITR-3 is more appropriate as it covers income from business and profession.

Business Income (if any):
If your client’s share in profit is considered business income (e.g., if he is a sole proprietor or partner), then filing under presumptive income scheme Section 44AD (ITR-4S) is possible if turnover < 1 crore.

In presumptive taxation:

You declare 8% (or 6% for digital transactions) of gross receipts as income.

No need to maintain detailed books of account or prepare P&L statement.

Expenses cannot be separately claimed.

Summary:

Salary: Report under salary income.

Share in profit: If genuine partnership profit share, exempt from tax, just disclose. If treated as remuneration, taxable as business income.

Choose ITR-1 or ITR-3 depending on income nature.

For business income under presumptive scheme, use ITR-4S.

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