Professional Income received in Saving Bank Account of Proprietor

Tax queries 137 views 2 replies
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Student CA Final / Tax Consultant
42 Points Joined August 2015

Proprietor is also a full time employee in a company and receiving Professional income from some other companies also. 3 persons are working in his proprietorship firm. 

Whether proprietor can receive professional income in his saving account (TDS also deducted under respective section) ?

Please refer any case law also. that will be more helpful.

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On 17 February 2025 at 13:09 Report
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Master in Accounts & high court Advocate
8756 Points Joined December 2011

As a proprietor and full-time employee, receiving professional income from other companies is a common scenario. Key Considerations 1. *Separate Business and Personal Income*: As a proprietor, it's essential to maintain a clear distinction between business and personal income. 2. *Professional Income*: The professional income received from other companies is considered personal income, subject to tax under the "Income from Other Sources" or "Profits and Gains of Business or Profession" head. 3. *TDS Deduction*: TDS has been deducted under the respective section, which is correct. Can Proprietor Receive Professional Income in Savings Account? Yes, the proprietor can receive professional income in their savings account. There is no restriction on receiving personal income, including professional income, in a savings account. Case Law Reference In the case of *CIT vs. S. Thirumalai* (2004) 271 ITR 419 (Mad), the Madras High Court held that: "...where an individual is carrying on business and also receiving salary, the salary received by him cannot be treated as part of the business income." This case law supports the view that professional income received by the proprietor can be treated as personal income, separate from business income. Conclusion In conclusion, the proprietor can receive professional income in their savings account, and it will be treated as personal income, subject to tax under the relevant head.

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On 17 February 2025 at 17:41
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Student CA Final / Tax Consultant
42 Points Joined August 2015

Thank you very much sir for explanation and also refering the case law. 

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On 18 February 2025 at 09:55


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