Calculation if switching to proprietorship after getting salary for 3 months

Sir/Madam

in SAME financial year

I received salary for 3 months = Rs X and Rs Y has been paid a TDS already

Remaining 9 months I was a proprietor receipts were Rs A and expense were Rs B.. it was a loss. i.e B is greater than A

Option 1

Now should I calculate my income as below i.e Rs A + Rs X (salary) - Rs B = income

If I calculate like that the tax liability is less than then TDS amount i.e  Rs Y. Can I claim refund?

Please note RsY was paid by my employer considering 3 months salary

Option 2

Should I declare my salary income Rs X under a different head in ITR

If so my tax liability is very high even though I suffered a huge loss in business

Which option should I choose?

Which form should I use? 

Shanthi

 

 

 

Replies (8)
Quick Summary
This discussion addresses how to calculate income tax when an individual receives a salary for part of a financial year and runs a proprietorship business for the remainder. The key question is whether to combine salary and business income/loss or declare them separately. The advice given is to file ITR 3, declaring salary income under the 'SALARY' head and business loss under the 'PGBP' head, as business losses cannot be set off against salary income in the same year and must be carried forward.

Pls post details.

Sir/Madam

Which ITR form to use in this case? Thanks

Itr form to choose .
as per source of income and others.

In same financial year I have received salary for 3months and 9 months I have run my own proprietorship business afterwards Thanks

So may I know which ITR form to use Thanks

You have to file ITR 3.

Your salary income will be declared u/h. SALARY, while business loss will be declared under head PGBP.

As PGBP loss cannot be set off against Salary, it will be carried forward to set off against future PGBP gains.

Originally posted by : Dhirajlal Rambhia
You have to file ITR 3.

Your salary income will be declared u/h. SALARY, while business loss will be declared under head PGBP.

As PGBP loss cannot be set off against Salary, it will be carried forward to set off against future PGBP gains.

Thanks Sir

Most Welcome ..              

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