Dear Sir,
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Yes, you can show the expenses for the part of income of 194C.
However, please explain where are you classified income of 194C?
Expenses for income received under 194C
The Form26AS as multiple incomes from different sources. The major part being under 192, there are parts received under 194J and 194C. Going for presumptive tax filing, 50% of the income of 194J is exempted. Can expenses be further shown (as per section 57(iii) of IT Act) for the part of income of 194C?
Asked 4 years ago in Income Tax
Show 194C income u/s 44AD.
Hii
You can show 194J as well as 194C for presumptive taxation, presumptive u/s 44 ADA applicable as per source of income not as per section of deduction of TDS
The payment, for which the TDS was filed under 194C, was actually part of the same work for which part payment was made under 194J. So in reality the payment was for work which falls under 194J, but the payer for some reason filed it under 194C and the TDS was also deducted accordingly (@ 1%). So since the ITR is being filed using the presumptive scheme, some expenses are already covered under the 50% exempted income (of 194J), as per 44ADA. Just need to know if expenses can further be shown and taxable income be reduced for the part of 194C.
Asked 4 years ago
No deduction of Section 30 to 38 (including unabsorbed depreciation) is allowed from such deemed profit. Therefore no deduction of such expenses can be taken from such deemed profit.
Hello,
For deduction under 194C, you can declare the same under 44AD Presumptive Taxation.
I hope this answer satisfies your requirement.
Regards,
CA Hunny Badlani
- Under Presumptive scheme, expenses can not be claimed. It is a minimum deemed income.
You can declare the 194C part under 44AD Presumptive taxation and claim 8% deemed profit on that.
As of now, the income of 194C is NOT declared as presumptive, but as 'Business' / 'Other income', hence no exemption availed there (compared to 194J incomes where 50% exemption is availed and the taxable income is hence 50% of the total 194J income). This however is because of the mistake of the payer that he deducted and filed the TDS under 194C, instead of 194J. And now that it is shown under 194C in the Form26AS, it is not clear whether the same can be declared as presumptive as well. So as of now the full income of 194C is being computed as taxable. @Hunny Badlani: Please clarify in simple words, 8% of 194C would be taxable or 8% can be deducted (as expenses) from the total income and the remaining 92% be taxable? Also what do you refer as 'profit' there? @LalitBansal: As I understand, the "source of income" is what the Form26AS shows? (And Form26AS shows it as 194C). Please tell what you are referring to as "source of income".
Asked 4 years ago
If you are opting for the presumptive scheme u/s 44ad the your NET income shall be considered as 8% of your turnover (net income will be considered 6% in case of digital receipts).
If you declare income of Sec. 194C part under Sec. 44AD Presumptive Taxation, you can claim profit to be 8% or actual, whichever is higher. The resultant figure (8% or higher) would be taxable. Profit is income minus expenses for such income.
First of all it's not necessary that all 194J income would be covered under 44ADA and all 194C income would be covered under 44AD so it's better to show income from the actual source where it's earned if you are going to do the same business for long term.
Many profession are there whose TDS is deducted under 194J but can be covered under 44AD and in presumptive income you can show 8% or 50% of turnover respectively as income and in TDS section of ITR you need to disclose where the income has been included in ITR.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you
Hi
If you have an eligible business under 44ADA, you can claim presumptive taxation for all the incomes.
You must have valid contract/agreement for the same.
In case of any notice in the future, you can explain mistake on part of the deductor.
Further, if you want to avoid notice or any enquiry and the amount involved is not substantial, show income for which TDS is deducted under section 194J under 44ADA and income for which TDS is deducted under section 194C as other income.
Yes you may show expenses from the income under the head Other Sources.
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