Google ad revenue other income, or business income?

1. There is nothing preventing a salaried emplyoee in entering into business.
2. Hence Income from building android apps can be considered as business income provided if you can prove it.
3. If the above is considered then show the Income under Business. Expenses can also be claimed.
4. Depreciation on mobile can be claimed under either under income from Business or under Speculation Business. There is nothing preventing claiming depreciation under Speculation Business since mobile can be said as an asset used for conducting Speculation business.
5. If you are not considering point 2 but considering income under other sources then you cannot claim any expense with regard to this income.
Moreover depreciation on mobile can be claimed only under Business Income - can claim under Speculation Business.

Thanks for the reply.  Say I go with the option of claiming the income under other income.  Say, my wife is also a software engineer and assists me in my android development.  In that case, can I claim that I have let out the mobile phone I bought to my wife and the income I have earned as that gained due to letting out of the phone, and hence be eligible to claim depreciation on the phone, as per section 57 5.2.2 here?

1. Theoretically what you said can be done. You will have to enter into a rent agreement for use of mobile with your wife. just to prove it.
2. Practically it will not hold good. besides the rent you give her will be taxable in her hands as income from other sources.
3. Y not claim depreciation under Speculation Business Income

Reason I don`t want to claim under speculation business income is that I have bought multiple phones for android development and testing.  For a trading business done my me individually, it does not make sense to use multiple phones.

Now, problem with showing the android apps income as business income is that I get very little income from that source, and if I have to include that income and the depreciation of assets of that income under business income and expenses, I would have to get my accounts audited, since the profits would be less than 8% of income (in fact, it would be in loss).  So, was seeing if there is a way to avoid all these complications, and still be tax compliant.

Deduction under income from Other Sources.
Any other expenses from earning income [ Sec. 57(iii)] : if the following 4 basic conditions are satisfied :
The expenditure should be incurred solely for earning such income
ii. it should not be in the nature of capital expenditure
iii. is should not be in the nature of personal expense.
iv. is should be incurred in the relevant accounting year.