Proprietor advance payment for services to be rendered. TAX CALCULATION - please advice

Tax queries 373 views 6 replies

Shanthi

Junior Student

234 Points Posted on 24 July 2022

A proprietor usually gets advance payment once in 3 months for his services rendered like below

FY 2020-2021

Rs X in April 5th 2020 for services to be rendered from April 2020 to June 2020

Rs X in July 5th 2020 for services to be rendered from July 2020 to September 2020

Rs X in October 5th 2020 for services to be rendered from October 2020 to December 2020

Rs X in January 5th 2021 for services to be rendered from January 2021 to March 2021

Income = 4X

FY 2021-2022

Rs X in March 5th 2021 for services to be rendered from April 2021 to June 2021

Rs X in July 5th 2021 for services to be rendered from July 2021 to September 2021

Rs X in October 5th 2021 for services to be rendered from October 2021 to December 2021

Rs X in January 5th 2022 for services to be rendered from January 2022 to March 2022

Income 4X

FY 2022-2023

The problem: He received payment of Rs X exactly in March 31st 2022 for advance services to be performed from April 2022 to June 2022

Case1:

Income in FY 2021-2022 is 4X

Income in FY 2022-2023 is 4X

Case2:

Income in FY 2021-2022 is 5X

Income in FY 2022-2023 is 3X

Question: So how will tax be computed? case1 or case2? If it is case2 tax liability becomes huge

I know there is a form 10E 89(1) for salaried persons to declare advance salary but is there a form like that for proprietor?

Thanks

Shanthi

Replies (6)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

211705 Points Posted on 24 July 2022

Income is 4X for both years, and the advance with TDS if any, need to be carry forward for next FY.

Shanthi

Junior Student

234 Points Posted on 24 July 2022

Originally posted by : Dhirajlal Rambhia
	Income is 4X for both years, and the advance with TDS if any, need to be carry forward for next FY.

Thanks Sir. Any special forms to be filled in or ITR3 is enough. ?

Shanthi

Junior Student

234 Points Posted on 25 July 2022

Sir just wanted to clarify that can I simply NOT show the 31st March 2022 income at all and proceed to file ITR3? Then show the income when I file next year? Or should I show the amount in some form etc? Thanks

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

211705 Points Posted on 25 July 2022

No additional form needed to be filed.

Under Schedule Tax paid.......... Table TDS.... fill the TDS amount carried forward to next AY...

Shanthi

Junior Student

234 Points Posted on 25 July 2022

Originally posted by : Dhirajlal Rambhia
	No additional form needed to be filed. Under Schedule Tax paid.......... Table TDS.... fill the TDS amount carried forward to next AY...

Thanks again Sir