My uncle earned a commission income of ₹17,00,000 (with TDS deducted under Section 194H). I advised him that he could claim some expenses from his earnings, but he hasn't maintained proper documentation for any of his expenses. Is showing 75-80% profit in this case reasonable and avoid issues? Please advise
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Filing ITR for commission income
Replies (4)
Quick Summary
Since Natute of the Income is a Commission and TDS Deducted under section 194H, Can you mention the exact nature of business in which commission earned ?, it will help us to provide more accurate advises.
Prima facie, 70 to 80% profit in commission income is good enough margin to justify for tax purposes
The nature of the business is earning commissions on sales of textiles. Thank you!
In present situation, commission earned on the basis of sales of textiles and it is similar to a trading in nature. It is advisable to show more profir margin (since you are acting as a intermediary) because nature of business itself requires a lower expenditure to do operations.
It is recommended to book profit atleast 85% and maintain the relevant vouchers and documents for the expenses booked to comply with laws and regulations.
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