Professional Fee--No Books--Tax Audit

Professional Fee--No Books--Tax Audit

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Hi Vineet,Do you have an OPTION to show the Professional receipts of Rs 70 lacs as something other than Income from Business or profession? No! You yourself have called it professional fee on which TDS has been made u/s 194J. Then where's the question of having it taxed under any head of income other than B/P? Tax Audit of course will be required since the professional receipts are way above the threshold of Rs 10 lacs. Whether or not any expense has been incurred in order to earn that fee has nothing to do with the requirement of tax audit. By the way, how come he hasn't incurred any expense to earn this much fee? Have the car, computer and all other professional paraphernalia been provided by the company? If he drives his own car, you HAVE to claim depreciation on it, or at least knock down the WDV by the prescribed rate of depreciation. If there are no books of accounts, then you better write those up Sir! Read up Section 44AA with Rule 6F. Professionals (I am sure your client falls in one of those categories, since TDS has been deducted u/s 194J) are required to maintain books of account if their receipts in a year exceed Rs 1.50 lacs. In case they don't, penalty of Rs 25000 could be levied on them u/s 271A. In case of businessmen, we can get away by writing in the Tax Audit Report that no books of account have been prescribed. But for professionals, there's no such leeway. They have to have the books listed in Rule 6F written up. If your client hasn't incurred any expense, then it oughtn't to take more than an hour to write up his books.
Thanks,

CA Sanjeev Bedi

--- In ICAI_CIRC_MEERUT_ CA@yahoogroups. com, vineet agrawal wrote:>> Sanjeev Sir,> > Also enlighten us on the following issue:-> > My client has received Rs. 70 Lacs as professional fees first time on which tax was deducted U/s 194J by the payer company. He is also a salaried employee in another company, drawing a handsome amount. In fact he has not incurred any expenses for this fees, nor he want to claim any expenses. > > My question is how to show this income in income tax return ?. If we show it as Business/Profession income whether Tax Audit is required even if no expense is being claimed? If yes, there will be no books of accounts, then what to write in tax audit report?> > Can we show it as Income from Other Sources?> > Solicit your expert view sir.> > CA. Vineet Agrawal,> New Delhi