Define profession in income tax

According to section 29, the profits and gains of a profession are to be computed in accordance with the provisions contained in sections 30 to 43 D. It must, however, be remembered that in addition to the specific allowances and deductions stated in sections 30 to 36, the Act further permits allowance of items of expenses under the residuary section 37(1), which extends the allowance to items of expenditure not covered by sections 30 to 36, where these are allowable according to accepted commercial practices. Admissible deductions (Sections 30 to 37) Inadmissible deductions (Section 40) Expenses or payments not deductible in certain circumstances (Section 40A) Profits chargeable to tax (Section 41) Other provisions Section 37(1) is a specific provision where deduction is provided for any expenditure laid out or expended wholly and exclusively for the purpose of the profession. On the other hand, a general provision has been made in section 28(i) read with section 29 for determination of “profits and gains of any profession” carried on by the assessee “in accordance with the provisions contained in sections 30 to 43D”. Meaning of Profession The expression ‘Profession’ has been defined in Section 2(36) of the Act to include any vocation. In the case of a profession, the definition given in the Act is very much inadequate since it does not clearly specify what activities constitute profession and what activities do not. According to the generally accepted principles, the mea...

Navigating taxes for your business may be challenging but you may have some respite when it comes to deductions on fees you pay to get some professional help. You may deduct legal fees paid to attorneys and fees paid to other professionals for "ordinary and necessary" expenses of your business, including expenses for helping you start your business. • The IRS allows businesses to deduct legal and professional fees for "ordinary and necessary" expenses • Businesses may deduct up to $5,000 in startup costs for total startup expenses of up to $50,000. Deductions are limited and need to be amortized for higher total expenses • The forms you need to report for such expenses differ with the type of business ownership • You cannot deduct legal or professional fees incurred for personal reasons Legal and Professional Fees for Business Startup When you are starting a business, keep track of all your costs while you are investigating business possibilities, creating the business, and setting up your organization. You will then need to separate costs for startup vs. organization. You can deduct up to $5,000 of startup costs out of total startup costs of up to $50,000. For total costs greater than that the $5,000 limit reduces by the amount the cost exceeds $50,000 but does not fall below zero. Any additional startup and organizational costs must be amortized. Legal and Professional Fees on Your Business Tax Return Where you include these fees depends on whether they are deducted or c...

• • • • • • • • • • • • • • What is Business and Profession? Income from business or professionis chargeable to tax only if the business or professionis carried on by a taxpayer at any time during the previous year. Let us first understand what is Business: Business, in simple words, means an occupation carried on by a person with a view to earn a profit. Business does not include income from the Profession or partnership firm. The business includes any – • Trade, • Commerce, • Manufacturing, • Even rendering services to others is considered as business. For example: Owning a shop, running a hotel, transportation, travel agency, share broking, etc. Profession may be defined as a vocation, or a job requiring some thought, skill, and special knowledge. So profession refers to those activities where the livelihood is earned by the persons through their intellectual or manual skill like: • Legal • Medical • Engineering • Chartered Accountant • Architectural etc. Any income generated from the above-mentioned activities will be taxed under the head “Income from Business and Profession”. Find the best plan Explore Maintaining Books of Accounts In case of Business A business meeting any of the following criteria needs to maintain the books of accounts as per the income tax act: • Income more than INR 1,20,000 or, • Total sales, turnover or gross receipts are more than INR 10,00,000 In any of the three immediately preceding previous years Moreover, this condition has been relaxed f...

Written by According to the Philippine Statistics Authority (PSA), the second-largest class of workers in the country are self-employed . They made up about 27.8% of the total employment rate in the country in 2017. The self-employment population also has a growing rate of freelancers, due to the rise of remote jobs online. As the self-employed population continues to grow, their contribution to the economy now bears as much gravity as those who are employed. For self-employed individuals and freelancers, taxes are sometimes easy to forget. Unlike being formally employed where taxes are automatically deducted from their paycheck along with benefits like health insurance and SSS contributions, take-home pay tends to be a bit higher for the self-employed. Thus, it’s tempting to just pocket all of that money every payday and move on. But unless you want the Bureau of Internal Revenue (BIR) to come knocking at your door, it’s wise to set aside a chunk of those funds to pay your taxes. Who is considered self-employed? Taxpayers in the Philippines are classified into two types: corporate and individuals. Those who fall into the individual taxpayer category, are those who are either employed (or a compensation income earner, which includes minimum wage earners) or self-employed. Self-employed workers are those who work on their own account or with one or a few partners or in cooperatives. In these jobs, the remuneration is directly dependent upon the profits derived from the good...

Table of Contents Checkout 1. Charging Section: [Sec. 28] Following incomes shall be chargeable under the head ‘Profits and gains of Business or Profession’: • • Profits and gains of any business or profession carried on by the assessee at any time during the previous year; • Any compensation or other payment due to or received by the assessee in connection with: ( a) termination or modification of any agreement for managing the whole or substantially the whole of the affairs of any Indian company or in India of any other company ; ( b) termination or modification of any contract relating to any agency in India; or ( c) vesting the management of any property or business to the Government or any Corporation owned/controlled by the government; ( d) termination or modification of the terms and conditions of any contract relating to his business; Note: By taxing the compensation received on termination of agency or on takeover of management (which is a capital receipt) as income from business, ii) provides exception to the general rule of non-taxability of capital receipts. • • Income derived by a Trade, Professional or similar association from specific services performed for its member; • Export incentives which include: ( a) Profit on Sale of Import Licenses granted under Imports (Control) Order, 1955, ( b) Cash assistance received or receivable against export under any scheme of GOI, ( c) Duty drawbacks of Customs and Central Excise duties against export, ( d) Any profit on...