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Any Indian IMers here paying tax under Section 44AD. Presumptive Taxation.

Discussion in 'BlackHat Lounge' started by bigman, Jul 28, 2012.

  1. bigman

    bigman Jr. VIP Jr. VIP Premium Member

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    My cousin just told about changes in presumptive taxation and how it can really reduce taxes without the hassle of producing bills.

    Is anyone aware of this and is anyone currently make use of this new section?

    Even better, if there are any Bangaloreans here that can put me in touch with a reliable tax consultant then nothin like it!

    Thanks all.
     
  2. krishnaverma

    krishnaverma Power Member

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    I am not aware about the new changes at present. In fact, I will be filing taxes for the first time this year here. If someone can give useful tips to save taxes, it can be beneficial for me too.
     
  3. shreenidhi

    shreenidhi Newbie

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    Form a business, register it, and write off all expenses against your income.

    I have a partnership firm under which my IM income is accounted. Allows me to charge of all expenses (software, adwords costs etc), so my taxable income is lower.
     
  4. howard_hughes

    howard_hughes Elite Member

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    talk to an accountant, he will file on your behalf.

    i asked my accountant to show 20% profit on total revenue ;) saved money big time :D

     
  5. angrish10

    angrish10 Junior Member

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    I get all IM money wired into my bank account.

    I talked to Chartered Accountant regarding filling the taxes and he asked me for the proofs of the income earned.

    Is it really required because i dont have any proofs. Will cpa company earnings page suffice as a proof. Help!!
     
  6. dheer

    dheer Jr. VIP Jr. VIP Premium Member

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    Yes if you are earning less than 60 L a year then you can use presumptive taxation and there you don't need to really show all the receipts in front of Income tax dept. Although if you are above 60L a year in 1 bank account then it won't work as with this mark Income tax dept might do scrutiny of your accounts.

    Best way to save taxes is to form a partnership firm or LLP this way you can show lots of expenses which you can't show when you are filing tax as individual.
     
    • Thanks Thanks x 2
  7. bigman

    bigman Jr. VIP Jr. VIP Premium Member

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    Awesome. Thanks man. So i straightaway show 8% as the profit and pay tax on it right? But then I'll need to clear the bank account too right? I mean, if I'm showing 8% taxes but there is more money than that in the back account, wont that raise eyebrows if they do come snooping around? I know that almost never happens for small timers but what do people normally do? Clear their bank accounts?
     
  8. divok

    divok Senior Member

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    Show some ghost employees working for you ...to clear out the money
     
  9. seriousjoker

    seriousjoker Registered Member

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    Even it is below 60, you will have to show invoices and bills of your expences and the source of income although you can genrate some fake bills but those must match with the money coming in your bank account and money you are expending from there. You can go as low as 10% of your gross income, but still no CA you will get who will sign blindly on it. If you find one let me know also.
     
  10. seriousjoker

    seriousjoker Registered Member

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    It will work if you withdraw money regularly from your account and there is a monthly pattern. You must have money in your account and you must withdraw it monthly to show it as sallary of your employees.
     
  11. divok

    divok Senior Member

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    My uncle has some gps business and his CA does all this work .....he has some 20 ghost employees ...considering each get's even 100000 per annum that's 20 lakhs of deduction from taxable income , which I think should be huge considering the size of his biz...
     
  12. seriousjoker

    seriousjoker Registered Member

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    It does not work like this, you must withdraw sallary for those ghost employees on monthly basis. Then only it will be viable. It is simple you must have money in bank and must withdraw from there regularly to show your expenses. In any month your expenses cannot be more than the money you have withdraw from your company account or you will have to show that money as a loan and must show the source of that money.
     
  13. divok

    divok Senior Member

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    Yup I meant he has arranged for those guys who work as ghost ...actually they are real persons...just go to a village in the most deserted/backward part of country .... pay a 5000 bucks ..... villagers will give you a copy of their official documents ....open a bank account using those documents ....get a ATM card ....enjoy ......this is just a rough example .