Income tax for proprietorship company

If your colleague considers it as salary income, then such amount can be deducted as expense when u file itr4. Entire 100% is your income but you can deduct 40% towards salary expense n also can deduct other official expenses to arrive at your taxable income. If turnover or gross receipts of your business is more than 1 crore, then u need to get your books audited u/s 44ab

Hi Poornima

Thank you for your response.

In this case, then my colleague need to pay income tax on that 40%?

I have some short term capital gain from equity too ( 30,000 ). Will I pay 15% tax on that and tax as per slab on proprietorship income [ 100% - 40% (colleague salary)  - any other office expense] ? 

Is investing in equity required audit by CA, what is limit for that?

Thank you.

 

1. Yes, your colleague has to pay tax on 40% (s/he will be able to claim deduction/exemption if any)
2. If you have paid STT on STCG, then tax @ 15% else at normal rate
3. I don't think any audit is required for investment in equity by CA
4. You can claim deduction u/s 80C etc if any (but not on STCG on which tax is paid @ 15%)

Hi Poornima

Thanks again.

But this create some confusion.

If you have paid STT on STCG, then tax @ 15% else at normal rate

STT is charged by broker always.

Thank you.
 

What I meant is if that cg has suffered stt, then tax at 15%, clear?

Thank you.

Welcome :-)