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Distribution of income

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Bhushan Dronkar

30 Points Posted on 29 May 2021

my client had received 4.60 lakhs in several months in his account.

however as per contract, my client has to distribute that amount to his 6 team members.

my query is how it is taxable as per income tax act ?
whole in hands of my client , or
divide there share between six members.

please solve my query.

Replies (4)

Quick Summary

A client received 4.60 lakhs and needs to distribute it among six team members based on a mutual understanding, not a formal partnership. The query is about how this income is taxed under the Income Tax Act. The core question is whether the entire amount is taxable in the client's hands or if each member's share is taxed individually.

CMA Poornima Madhava

CMA

13117 Points Posted on 29 May 2021

What's the nature of contract? If they are employees, then whatever paid to them would be a business expense and entire 4.6 lakhs received is an income to the client.