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Q. > Please Help: clarrification on head of income tax
My friend is selling products of one ltd company and he received commission / incentive for the sale of each product . His bank account effected due to this work , he got cheque from customer and deposit in his account and issue cheque to company against the sale made by him . Commission or incentive trf by company to his bank account directly after deducting TDS
So please clarify the head of income tax . Is it income from business and profession or it is income from other sources
Is the answer differ if he got cheque on the name of company and directly deposit in his account and receive commission or incentive directly in his bank account
answered Jun 21, 2011 by CA. Sachin Data , Alwar
PLEASE BRIEF OUT FURTHER......
answered May 29, 2013 by Vikash Kumar Jha , Cuttack
Take it under the heads of Income from other sources.
Experts Panelist
Comments
CA VIKAS JAIN
07-Jun-2011 , 04:55:54 amits depends upon the facts of the case and may treat the commission income either as business income or other source income. IN first situation as given by you its seems that there is principal-agent relationship between the company and your friend. so the commission income will be treat as business income for your friend. Take an example of another situation of insurance agents, they are selling product of the company and consideration of a product directly paid to the company while agent receive commission from the company, now in that case this commission income will be treat as other source income. here again some other factors should be considered to decide whether we should grouped as business income or not like use of number of assets, establishment detail etc. Therefor in second situation if there is no such material expenditure happened to earn this income, particularly depreciation then you must take it as income from other source.
CA. Sachin Data
08-Jun-2011 , 03:54:09 amThe answer depends on the nature of your freind's business.. What is his main business is going to determine the relevant head.. In the second case of course, it seems to be covered under the head "IOS".