Professional income wrong head shown in Form 16

If TDS deducted u/s 92, then you can not show as professional income 

You might think about talking to the senior people from the HR and the Finance Department. If they have appointed you as a consultant and not an employee and it is duly shown in the appointment letter then they are not supposed to show your professional fees as Salary and deduct TDS under Section 192.

Apart from tax issues, there are PF issues also.

- If you treat it as a professional income then you would be liable to charge GST, raise tax invoices on monthly basis and file GST returns on quarterly basis. Might be Co. is not interested in paying extra GST though Co. can take ITC benefit. In such case, you have to pay GST out of the present professional income. Also if you were liable to obtain GST registration and pay GST in FY 2022-23 then there would be consequences for not complying with the above requirement of law.

- Alternatively you can file ITR with salary income to avoid levy of late fees and revise it after 31st July but before 31st Dec 2023 if you are confident Co. will treat it as a professional income and rectify Form 26AS. Also keep in mind the above GST implications.

For detailed discussion you may opt for phone consultation

Hi, 

It will depend upon your offer letter and if you offer letter says advisor, you can claim it as professional income irrespective of TDS.

We can discuss this over call as I could not understand your question completely.

Hello,

To address this issue, you have a few options:

1. Professional Income Treatment:

   • If your income is treated as professional income (Section 194J), you will be liable to charge GST, issue tax invoices monthly, and file GST returns quarterly.
   • The company may not be interested in paying extra GST, but they can avail Input Tax Credit (ITC) benefits. In this case, you would need to pay the GST out of your professional income.
   • Keep in mind that if you were supposed to obtain GST registration and pay GST for FY 2022-23, not complying with this requirement may have legal consequences.

2. Filing ITR with Salary Income:

   • As an alternative, you can file your Income Tax Return (ITR) with salary income initially to avoid any late fees.
   • If you are confident that the company will eventually treat it as professional income and rectify Form 26AS, you can revise your ITR after 31st July but before 31st Dec 2023 to reflect the correct income classification.
   • However, be aware of the potential GST implications as mentioned above.

Hope you find the information helpful. You are free to contact me for further discussion.If you could spare two minutes of your time to write a review, It would be really grateful and very happy to read it.

Thank you.

Shubham Goyal