Business or Profession income?

Taxation
1

Hi @Quicko and All tax experts,

I have a doubt on which option should I choose in below conditions (Business/Service or profession)

  1. I have income from property (real estate consulting) (Income is not from buying/selling so not considered as capital gain).

If it is Business then which category (Nature of Business and Business Sub Category should I choose)
If it is profession then which category (Nature of profession and Profession Sub Category should I choose)

  1. I have income from IT software consulting.

If it is Business then which category (Nature of Business and Business Sub Category should I choose)
If it is profession then which category (Nature of profession and Profession Sub Category should I choose)

Also, What kind of expenses I can claim in both the cases and what kind of receipts do I need to submit?

2

@Quicko
Please check and reply.

Hi @Meher_Smaran @Jason_Castelino,
Please comment, just in case if you know.

3

Hi @Quicko,

I will appreciate if you help in this matter.

4

Hi @Quicko,

Are you there?

5

Hello @muthu.radhakrishnan

1. Real Estate Consulting Income
Since you are not engaged in buying/selling properties (no capital gains), but earning through real estate consulting (like brokerage, advisory, facilitation), this is treated as Business.
Nature of Business: 07005-Other real estate/renting services n.e.c

2. IT Software Consulting Income
This is considered as a profession (because “technical consultancy” is specifically covered under section 44AA of the IT Act)
Nature of Profession: 14002-Other software consultancy

3. Expenses You Can Claim (Both Business & Profession)
You can claim all expenses that are wholly & exclusively for your work, such as:
Office rent/co-working charges
Internet, mobile, software subscriptions
Travel (client meetings, site visits for real estate)
Professional fees paid (legal, accounting, etc.)
Salaries/contractor payments (if you hire assistants)
Depreciation on laptop, phone, office equipment
Marketing & advertisement expenses
Utilities (electricity, etc.)
Bank charges, consultancy expenses

Cannot claim: personal expenses, capital expenses (except depreciation), expenses not related to your work.

Hope, this helps!

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6

Hi @Quicko,

Thanks for your response.
If I am declaring profit of 50% or more then do I need to do audit (Collective income from both the Businesses is less than 25,00,000) ? Do I need to keep/show receipt of expenses?

7

Bro these seems much complex then go with some good knowledgeable CA to file it

You can double check if he makes any mistake, check all before filing but don’t do alone

Saying for your safety, one mistake can cause issue later

8

Thanks @Kumar_Thakkar for your reply and concern.

It should not be complex for Quicko as they claim they are tax expert.
BTW, I have bought Quicko plan and subscription and expecting them to help.

1 Like