Taxation on income received from franchisor.

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Monika (Querist)

05 April 2016 I'm working as a teaching partner with my franchisor. We are required to collect fees from students and deposit the same in franchisor account. Franchisor pays me my share after deducting 10% from it. How am I suppose to treat such income. Will it attract service tax ?

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Murtaza I Bhagat

Murtaza I Bhagat (Expert)

05 April 2016 I think Franchiser is deducting 10% u/s 194J Fees for Professional Service

Monika

Monika (Querist)

05 April 2016 Yes but under which head and section is the income taxable ?

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Abhishek Ranjan Singh

Abhishek Ranjan Singh (Expert)

06 April 2016 It is Income from Profession. You can deduct your profession related expense and file your Income Tax return and claim the TDS refund (If any). If your gross total income is more than 10 Lakhs than you are liable for service tax registration. After that you will charge service tax to your franchisor and pay it to government.

We would be glad to know your doubts or queries. In case you need our assistance in handling it, please feel free to contact us at :
abhishek@arssolutions.co.in
+919022838615
www.arssolutions.co.in

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Murtaza I Bhagat

Murtaza I Bhagat (Expert)

06 April 2016 First I was confused by word "Partner" and "Share" but then I realized your franchiser shown you as professional person and paid your shares as fees u/s 194 J and deduct 10% tds. Thats why we (me and Abhishek sir) replied as per your query. you can do exact what said by abhishek sir...!!! prepare Profit & Loss and calim expenses and file your IT return in ITR4 as Business & Profession income.

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