• Validity of Invoice without my name as buyer ?

I do IT job from which I earn taxable income and file ITR.

Recently, I started doing a side business. I sell retail subscriptions of online VPN services. 
What I do is , for example, I buy 1 Subscription of VPN at 4000 INR as a retail customer and then I sell it to 4 students at 1250 INR each, so total I get is 5000 INR. This means I make profit of 1000 INR i.e 20% profit.

My total turnover is much less than 20 lakhs so I am not concerned about GST. 

My Concern is mainly about paying income tax. So if I receive 1,00,000 in my bank account then my actual profit is only 20,000. Rest 80,000 I spend in purchasing VPN from the online vendor. 
=> BUT My PROBLEM is that in the invoice that vendor website generates my Name is not there. Vendor's GST , name and all details are present But my name is not added in Invoice. Vendor will not add my name as its a big company and only sells B2C and not B2B. 

So what do I do for tax compliance - 
#1) Do I have to pay tax on the total 1 lakh that I received in my account ? 
#2) Can I pay tax on only 20,000 profit ? But will IT dept accept the invoices without my name on it ? I have Bank Transactions that prove the validity of the invoices showing payments to Vendor.
Asked 3 days ago in Income Tax

  1. You must pay income tax on your net profit, not on the entire ₹1,00,000 received. So, tax will apply only on your ₹20,000 profit after deducting your expenses.

  2. The Income Tax Department generally accepts business expenses substantiated by bank transaction proofs even if the vendor’s invoice does not mention your name, especially for B2C supplies. Maintain all payment records and vendor invoices carefully to support your claims.

Hence, declare full receipts as income and deduct your genuine business expenses supported by bank statements and vendor invoices, even if invoices lack your name, for accurate tax compliance.

Shubham Goyal
CA, Delhi
531 Answers
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