Tax Filing Guidance

[canikhil]

If you come under point no 1, means no need for books of account but in that case, do u need to have books of account to carry the forward loss? Income above 6% of turnover

if you are not maintaining books, how would you account for losses!!

regardless of the turnover, if there is a loss and you want to carry it forward, maintenance of books of accounts is the default mode.

 

[godfather]

if you are not maintaining books, how would you account for losses!!

regardless of the turnover, if there is a loss and you want to carry it forward, maintenance of books of accounts is the default mode.

Ok, I got a response like this

As per the Income Tax Act, Section 44AA and Rule 6F, you are required to maintain books of account if your income or income exceeds a certain limit. Limits and accounting books vary depending on the nature of your business or business.



If you work in the following industries, you should maintain books of accounts if your gross income exceeds Rs. 1,50,000 in each of the last three years or is expected to exceed Rs. 1,50,000 in new projects:



legal
medical
Technical knowledge
Architecture
Accounting skills
Technical Consultants
Furniture in the room
Authorized Representative
The producer of the film
Company Secretary


If your business is not listed above, you should keep books of accounts if your income exceeds Rs. 1,20,000 or your sales, revenue or gross income exceeds Rs. 10,00,000 in any of the last three years or in case of a new formation of trade or business is expected to exceed these limits.



The book of accounts you have to maintain in this case is not prescribed by the Income Tax Act, but it should be such as to enable the Assessing Officer to calculate your taxable income



You are required to maintain the book of accounts for six years at the end of the relevant year.



So based on your question if your income is less than Rs. 1.5 lakh and the income is Rs. 10 L, you are not required to maintain books of account in accordance with Section 44AA and Rule 6F unless you are engaged in one of the specified activities mentioned above.

However, it is advisable to keep some basic records of your income and expenses for your own reference and tax compliance.

No, you do not need to maintain books of account if you have a loss of Rs. X and your income and turnover are less than the specified limits unless you belong to one of the specified professions. However, you should report your loss in your income tax return and carry it forward to the next year, if applicable. You should also keep some proof of your loss, such as bank statements, invoices, receipts, etc. for future reference.

I am confused that's why on the same topic.

 

[canikhil]

Ok, I got a response like this



I am confused that's why on the same topic.

here is the problem with theory vs practical. so again - how would you know your loss without maintaining books! The technicality of the ITR is that it if you say no books maintained, it will automatically put you under the presumptive taxation clauses and throw error if you show a loss.

 

[godfather]

here is the problem with theory vs practical. so again - how would you know your loss without maintaining books! The technicality of the ITR is that it if you say no books maintained, it will automatically put you under the presumptive taxation clauses and throw error if you show a loss.

Thank you Now understood.

 

[PreSap]

Hi canikhil sir,

I work as a technical consultant (software development) and have been filing tax using section 44ADA.

I am talking to a potential customer who wants to give me a job on a contract. The customer has mentioned that he needs me to enroll for provident fund as this is now mandated by the government.

I have never had to do this till now for any of the contract jobs I have taken.

My question is, if I enroll for PF even though I am a consultant, will I lose the ability to file under section 44ADA?

Thanks in advance!

 

[canikhil]

Hi canikhil sir,

I work as a technical consultant (software development) and have been filing tax using section 44ADA.

I am talking to a potential customer who wants to give me a job on a contract. The customer has mentioned that he needs me to enroll for provident fund as this is now mandated by the government.

I have never had to do this till now for any of the contract jobs I have taken.

My question is, if I enroll for PF even though I am a consultant, will I lose the ability to file under section 44ADA?

Thanks in advance!

see, if you are getting Form 16 ie salary income, then to the extent of that amount, 44ADA wont apply. However, for your other professional incomes, if any, 44ADA will still apply.

 

[PreSap]

see, if you are getting Form 16 ie salary income, then to the extent of that amount, 44ADA wont apply. However, for your other professional incomes, if any, 44ADA will still apply.

Thanks for clarifying, Ca Nikhil!

Yes, I would prefer the payment to come under 44ADA, so I guess this is a bit of a problem for me.

 

[canikhil]

Thanks for clarifying, Ca Nikhil!

Yes, I would prefer the payment to come under 44ADA, so I guess this is a bit of a problem for me.

see. then you should have this conversation before taking up this assignment as the tax differential could be significantly higher. Forget the PF part. Talk about whether you would be given payments as professional or salary. Work out the tax differential and see if that can be accommodated by the client if he wants to pay your costs as salary only.

 

[timepass]

There is no tax on inheritance. However, there is a tax liability as and when you dispose of the property. Whether a tax is payable or not will depend on the indexed cost of the property and the selling price. it could be a case that no tax is payable because the indexed cost is higher or equal to the sale price.

A lot of people assume there is no taxability. But that is not correct.

What if the proceeds from the sale of inherited property are used for buying another property.

Suppose I receive Rs. 25 lakhs as my share of sale of ancestral property and :

a) Suppose I buy another property for Rs. 30 lakhs

b) Suppose I buy another property for Rs. 20 lakhs.

What would be the time limit for such a purchase ? Suppose I buy the other property within 1 year of receiving the share, but the next purchase is in another accounting year.

Thanks.

 

[Mishra_86]

How do tax brackets work, and what determines which bracket someone falls into?