Audit fee
K LAL
(Querist) 16 August 2013
This query is : Resolved
Sir
I am an individual Indian personal assese in I.TAX in Delhi.My accounts are prepared by my C.A.I have only property rental income & there is no other income, and I am a senior citizen.
The amount is paid as his fee annually by me through cheque
.
He shows this amount in my drawings but does not show as his fee.
Is this amount paid to him, a legal expanse an audit fee or handling my accounts which later on I can claim as my expenditure out of my total rental income? Kindly guide me.
Guest
(Expert) 16 August 2013
Mr. Lal,
You have got exemption limit of Rs. 2,50,000/-, as an individual and being a senior citizen. Do you find the income tax department having given any exemption limit to any commercial organisation?
Exemption limits are provided to individuals only to cover up their general type expenses for which he is unable to keep accounts like commercial organisations. So, even if the CA gives you receipt as audit fee, you would not be able to claim any refund for such type of expenses.
Had you been entitled to claim refund, he would definitely have accounted for the same in your accounts and shown that in your IT Return.
Rajendra K Goyal
(Expert) 16 August 2013
Well advised by the expert. Nothing more to add.
Anirudh
(Expert) 16 August 2013
Dear Mr. Lal,
From your income from house property, only 30% is allowable as deduction. No other expenditure is allowable as deduction. Therefore, the audit fee paid by you is not allowable as deduction. You are liable to pay income tax on the net income from the house property (i.e. gross income minus 30%), after availing the exemption which is Rs. 2.5 lakhs in the case of senior citizen.
