Do suggest to calculate tax on professional income

Tax queries 436 views 5 replies

B Alam

N/A

39 Points Joined July 2013

I am a Web Master and so I want to show my income as "Income through Proffession". I am 35 and a "Individual". I am going to pay tax for the first time for AY 2014-15 and I want to do all this by myself (through online) without any agent/middle-man.

So before tax submission, I would like to ask for your help. Please suggest how shall I arrange my below given income & expenses in order and how much the exact amount I need to pay as tax.

My Total Income (April,2013 to March,2014): Rs.387583.24

My Expenses are as follows-

Purchase of New Domain/Website : Rs.600
Renewal of Domain name: Rs.1233.71
Purchase of Script: Rs. 4693.41
Hosting bill payment: Rs.10000
Internet Bill: Rs.18000
Electricity Bill: Rs.4800
Office Rent: Rs.18000
Staff Salary: Rs.60000

Other Expenses (Under 80C)

Child School fee: Rs.2760
School Admission fee: Rs.3455
LIC Premium paid: Rs.12717

Thus Total Expenses: Rs.136259.12

So as per my calculation, payable tax amount is thus -
Total Income: 387583.24
Exempted : - 200000.00
Expenses: - 136259.12
thus taxable income: Rs.51324.12 /- @ 10% = Rs.5132.

Please suggest, is the income tax amount Rs.5132 is correct or not? Also suggest me how should I write down the above income and expenses on plain paper in respective order.

Thanks.

Replies (5)

Arpit Pachisia

734 Points Joined July 2012

Hello Alam,

As you provided, your total income is Rs.3,87,583 and your expenses are of Rs.1,17,327. So your net business and profession income is Rs.2,70,256. Now you claim certain deduction U/s 80C of Rs.18932. So your net taxable income is Rs.251,324 as also computed by you.

Now upto 2 lakhs, no tax liability arises and you will get tax rebate of Rs.2000 too. So your tax liability is of Rs. 51,324*10% = 5132 - 2000(Rebate)

= Rs. 3132 + 3%(cess) = Rs.3226.

You just has to made simple P&L A/c and show their your income and expenses. You may also claim depreciation here on assets you purchased.

Thanking You

B Alam

N/A

39 Points Joined July 2013

Thank you ( @ Arpit Pachisia) for pointing me to tax rebate of Rs.2000/- and Educational Cess of 3%.

I have visited the website incometaxefiling and registered myself with the website for e-filing but currently only ITR-1 and ITR-4S is available to fill. I think my ITR form will be ITR-4, am I right?

Swami Ayyappa Nuli

TAX ADVISOR & CONSULTANT AT G.S.T SUVIDH

1372 Points Joined June 2012

Yes agree with his Reply

Arpit Pachisia

734 Points Joined July 2012

Hello Nuli,

As I mentioned above, from tax liability only rebate will be deducted and than on such remaining taxable amount, we will charge cess. Rebate will be available before cess.

Upto Rs.2,20,000(BEL+ REBATE), no tax liability will arise as no cess will be charged.

Arpit Pachisia

734 Points Joined July 2012

Hello Alam,

Yes, you had to file ITR-4, at this time only ITR-1 and ITR-4S is available to file. But wait as income tax site will be updated soon and remaining ITR's will also be soon available at site. Last date for filing ITR is 31/07/2014. So need not to worry, you got much time and site will be update soon.

Thanking You