my friend is contractor he got payment of 10 lakhs after deducting tds from this income he also done expenses of 7 lakhs from this income but now he claim tds but he show his gross income from 3 lakh without giving information how much he receive and how much he expended whether this return is correct or not
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contractor
Replies (3)
The return is not correct. The contractor has to show gross income (Rs. 10 lacs + TDS) and claim expenses of Rs. 5 lacs. If TDS is X amount, the return should show income at Rs 10 lacs + TDS - Rs.3 lacs. Then only he can claim credit for TDS amount of X.
he is individual whether he has to keep accounts of expenses if his case comes in to scrutiny how he show that he show expenses of 5 lakhs pls telll
If he is a civil contractor than he does not need to maintain books of a/c s and pay taxes at a presumptive rate of 8% of his gross receipts u/s 44AD.
If he is not so then he shud maintain books of account u/s 44AA as his gross receipts is more than 10lacs and so his IT return is wrong.And also he shud include TDS amount in his gross receipts.
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