Ajay (Assc) (25 Points)
24 October 2012Hi All
I have a question to be asked.. Lets suppose a salaried employee conducts some trainings... So, the income earned will be atrributed to "Income from other sources".. Am I right??
Also, any expenditure incurred for the same, say, Laptop, Power back up (UPS/ Inverter), Skype account fee, etc - Is this allowed as a deduction?
br, Ajay M
Member
(Management)
(325 Points)
Replied 24 October 2012
Is it a part of his job? In that case, the employer-employee relationship subsists and you cannot treat it as income from other sources as that will form part of your salary, even if you are paid seperately for it. However, the answer depends on the facts of each case.
If you do that on your spare time, then may be you can claim it as income from other sources, but you may not be able to claim too many expenses from such income, since the scope for such deductions is limited by Section 57.
Saket Sinha
(Student)
(129 Points)
Replied 24 October 2012
Dear freind
if you are conducting training as a part of your job then all the money that you received is clubbed in the salary head i.e you are requred to this because of your job responsibilities,otherwise you cantreat this income as Income from other sources and claim deduction under the sec-57 of the Income Tax Act1961
The scope of sec57 is very limited.
Alternatively if you are treating as a professional income then you can claim all the deductions mentioned by you .in this cas normal profit and loss account must be prepeareb by you and the income is calculated in accordance with the sec28 to 44D of the act.
Ashish M
(Chartered Accountant)
(2731 Points)
Replied 24 October 2012
Hi,
AS rightly said by saket. If it forms part of the salary or even if not forming part of it, recieved from the employer by virtue of having employer-employee relationship, the same will be covered under salary and no expense can be claimed.
In the other case, in my view, Sec.57 gives the assessee the liberty to deduct any expense which are spent for the purpose of earning the other income. I don't find there is anything limited in that. It says any expense spent wholly for the purpsoe of business shall be deductible.
hence, if the expenses u mentioned are exclusively for the puropse of earning that other income, u can very well claim the same.
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- Ashish
(8802999731)
Ajay
(Assc)
(25 Points)
Replied 24 October 2012
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No, its not part of the regular job and the income is not salary... Assume it is done in the spare time... The doubt i have is sec 57 says capital expenditure is not allowed.. So, Can one claim deduction for laptop, UPS, etc which are used specifically for this activity of trainings?? Also, are they deductible wholly in the year in which they are incurred or needs to be depreciated??? Also,does it fall under prof income or income from other sources?? Do one have to prepare P&L as per Sec 28 to 44D? br, Ajay M
Originally posted by : Member |
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even if you are paid seperately for it. However, the answer depends on the facts of each case. |
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Saket Sinha
(Student)
(129 Points)
Replied 24 October 2012
Now you r saying that it is not forming part of the salary. If training givern by you is of frequent nature then it will be treated as a professional income and you can claim deduction under sec28 to 44AD while calculating your professional income. For that pupose u have to raise bill in the name of yours if it is a case of sole proprietorship.
Profit and loss account and balance sheet is prepeared in that case.Applicability of sec44a regarding compulsory maintainence of books of account depends on ur total receipts.
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