Guidance regards filling itr4s ay 2012-13

ITR 1274 views 3 replies

Udgam Koomar

Tax Technologist

1949 Points Joined August 2011

Thanku every one for going thru my post. First of all im bed ridden due to accident so dont work for last 3 years. Earlier I was employed and used to fill ITR2. This FY 2011-12 I have started a home based work where I reply to users query online and the owner of the company simply pays me fixed 15000/- PM under contract for a year starting Mar2011 ending march 2012 . The important points here are: (a) I am not in contract as a company, i am an individual, I am not owning consultancy, any company, firm etc, just an individual (b) I dont maintain any book of accounts, any expenditure records (c) The total yearly income will be 1.8L, I just consider it as a regular salary though under 194C 1% TDS is done.

Now the question is, as per earlier advise, someone said I need to fill ITR4S (EXACT Quote: show the net income =< 8% on the gross receipt of this job work and no need of account books if your total groos receipt during the fY below 60 lac.) ... So now i went through ITR4S and have some questions:

(A) What does presumptive income mean in my case? Its fixed 15K per month so i know how much i will get till Mar12 so what to presume and what does <=8% mean. the form says.......If income is less than 8% of Gross Receipts, it is mandatory to have a tax audit under 44AB and Regular ITR 4 form has to be filled and not this form......so what is my gross receipt 1.8L? and 8% of this means 14400/- so what do i do of this figure?

(b) What are sundry debtors/creditors, cash balance etc in row E7-E10, can i leave these blank or NIL as I dont maintain any records?

(c) What to fill under nature of Business/profession drop down menu? I just fill online forms, dot won a busines and the website that i work for is an IT based BPO company. There are 5 types of OTHER listed in the menu?

(d) Since the amount earled is very less (1.8L) and I am not into any business just temporary offline contract work, can I just not continue filling ITR2 and fill this 1.8L income under OTHER SOURCE rather than filling ITR4S and complicating it? Since this assignment is just for this year. Please guide suitably.

Replies (3)

Prakash

Chartered Accountant

560 Points Joined September 2011

Well Previously they might have advised you tax planning

Let me explain about your case

Fisrt you are not in employement with your comany, and your comapny paying you some charges for your service as works contract service and deducting TDS on it

So, what ever you are getting is not taxed as Salary Income, It will be treated as your business only

For this you have two options available, you can directly go for Presumptive Tax provisions and calculate tax as specified above (Presumptive Income means that the govt assumes that particular industry has average profit margin as 8%, so they are aksing to pay ateast 8%)

Option number two, You can prepare one Profit and Loss account showing all the expenses you incurred for this duty, like telephone, electicity, Books and Periodicals, Computer Depreciation and any other expenses related and Prepare Balance sheet to with some investment like computer etc

By this you can arrive at some profit which may be more than 8%, Obviosly it will and File your return accordingly. Even here also you need not maintain any books.

I suggest to you to go for Option 2 as when you go for any personal loans they will generally consider your Taxed Income (GTI), In option 2 you can show higher amount to the extent you can bare tax (Of course as of now no tax as income itself 1.8L) For this you may require Professional Help to prepare your Financials. If you can prepare well and good

Udgam Koomar

Tax Technologist

1949 Points Joined August 2011

Thakyou for a detailed reply Prakash. I need to know i dont need to maitain any records na? No books of acount etc as I cnt do it as I am not an acountant an have no commerce idea, this is just a temp assignment and want to treat it normally.