Business income

Hi,

Please note that you can pay advance tax number of times. There is no restriction. Suppose on 1st September you felt that your advance tax should be 10000 for this period and you have deposited the same and on 15 September you feel that it will be 15000, you can deposit the additional 5000.

This is how you have to best estimate your projection and deposit the advance tax considering your latest projections.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.Com

hi,

I you want to start a commerce business- you have two options available-

Either you can opt for maintaining all accounts - profit and loss accounts and balance sheet. Then advance tax depends upon Income you earned after claiming all the expenses. You can pay some tax amount in the month of

december depending income you have earned in the month of october and november.

It also depends - If your expenses are more initially , then you are not liable to pay any advance tax.

Second option is that - you can opt for presumptive tax under section 44ad- Here Income will be assume at 8% or 6% assuming all expenses have already been claimed.

So if your income is more then 8% then you can opt for this option. Under this Advance tax to be paid in one installment i.e on or by 15th March .

Hii

prepare monthly/quarterly Profit and loss account of your business by this you got current period income and can may forecast future income accordingly and able to calculate advance tax calculations

Hello,

There is no straight jacket methodology to make sure that you predict the exact sales in the forthcoming quarters. It is very obvious that your actual sales will not exactly match with your projected sales. You will have to take your business decision making into consideration and project as to what will be your sales during the year.

Any amount of shortfall can be adjusted in the next quarter.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, ACA, LLB-GEN, CERT. FAFP

Hi,

The law only provides the percentage of tax to be paid in advance and the dates by which they have to be paid. The onus is on you to calculate it. You could keep reviewing your taxable income regularly and pay taxes accordingly. The dates specified are only the outer limits, you can pay before that too, any number of times. Of course, your actual and estimated sales will differ, but you can pay the additional tax it in the next quarter.

Regards,

Keerthiga Padmanabhan

M.Com., CA, LL.B

Hi,

Advance Tax calculations are based purely on assumptions. You have to calculate your profit based on your projected Income and expenses and then pay Taxes.

Hi,

Once your business transfer to Partnership Firm , it will be a new entity (new Pan Card) and can claim the benefit of 44AD.

As long as your expenses are less, it is viable to go for section 44ad

Hello Sir,

It appears that you are starting a new venture. I will answer your points here but I would still suggest to either talk to a professional or meet one in your city in person to understand the entire structure as 1 small assumption or confusion here and there will impact hard on your liabilities.

1. Yes, 44AD is a decent option if you are elligible for it, as it involves less of compliance.

2. Yes, it will based on the scenario mentioned by you.

3. 44AD if you are elligible for it.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, ACA, LLB-GEN, CERT. FAFP