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Income tax on trading

kiran (sr engineer) (41 Points)

11 May 2014

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

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4 Replies

Sahil Bhatia (Practicing Chartered Accountant) (290 Points)
Replied 11 May 2014

Any expense related to business can be claimed(except some disallowed expenses u/s 40). And your income will be calculated normally as income under Business. As your sales turnover doesnt exceed 1 crore you are not liable for tax audit u/s 44AB

HEM@NT G@RG (ARTICLE ASSISTANT) (313 Points)
Replied 11 May 2014

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...

kcagarwal (chartered accountant) (103 Points)
Replied 13 May 2014

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