Hello experts
How does a shop keeper involved in trading calculate his income tax ?
If he is selling only 1 type of item for Rs. 100 whereas his purchasing cost is Rs. 10.
He is selling 1 lakh items per year.
Any particular template of expenses and the tax calculation method available ?
Can some one prvoide me some information please ?
Thank you
Kiran
Hello Kiran,
Plz describe the nature of trading,product.
Any expenses incurred directly or indirectly for the purpose of selling are allowed like accounting charges,freight,salary to employees,bussiness promotion expenses,depreciation,vechicle running and maintaince expense etc...
CALCULATION OF INCOME TAX ON Trading
First of all, you have to prepare the trading and profit loss acc ount for the trading. As you must be aware that, opening stock, purchases, direct and indirect expensed, sales, closong stock and other receipts are to shown in trading, profit and loss accont. Whatever the net profit shall be come, that should be considred for the calculation of income tax
C A K C AGARWAL
income can also be taxable on presumptive basis u/s 44 AD if your turnover is below 1 cr. and net profit is 8 % or more.
but if you show ur profit below 8% than you need tax audit u/s 44 AB
CAclubindia
