MSC1 (Director) 12 August 2010

How to calculate Income Tax

Hi Experts,

I have a question that, a person is working for a XYZ Life Insurance company ltd, as a branch manager, and having salary around 7 lakhs,and he also getting a commission/incentives around 3 lakhs (which is variable) and he also having a consultancy business in the same profession, ok i am making it clearer.

Salary for the A.Y 2010-11- is 700000/-

Incentive A.Y.2010-11- is 300000/-

Business Income A.Y.2010-11- 500000/-

Business Expenses Including all : A.Y.-2010-11. 1200000/-

and has also a housing loan where he paid the interest A.y.2010-11, is 120000.00

and Principal paid for A.Y.2010-11 is 103450

LIC and other savings is , 140000/-

U/s 80 D. INVESTMENT. 17850/-

and he paid . 200000/0 for his fathers medical treatment (partial disability)

Can any expert give me the calculation of above matter income tax and which ITR Form should be used for the the above income. ITR-4 or Saral-ITR-1. can he return the file online.

I'll be highly appreciated if u post an answer early.

Regards

MS Consultant

Reply Follow

1 Replies

A V Vishal (Advocate) 12 August 2010

Originally posted by :MSC1
"	Hi Experts, I have a question that, a person is working for a XYZ Life Insurance company ltd, as a branch manager, and having salary around 7 lakhs,and he also getting a commission/incentives around 3 lakhs (which is variable) and he also having a consultancy business in the same profession, ok i am making it clearer. Salary for the A.Y 2010-11- is 700000/- Incentive A.Y.2010-11- is 300000/- Business Income A.Y.2010-11- 500000/- Business Expenses Including all : A.Y.-2010-11. 1200000/- and has also a housing loan where he paid the interest A.y.2010-11, is 120000.00 and Principal paid for A.Y.2010-11 is 103450 LIC and other savings is , 140000/- U/s 80 D. INVESTMENT. 17850/- and he paid . 200000/0 for his fathers medical treatment (partial disability) Can any expert give me the calculation of above matter income tax and which ITR Form should be used for the the above income. ITR-4 or Saral-ITR-1. can he return the file online. I'll be highly appreciated if u post an answer early. Regards MS Consultant	"

Dear MSC1

Point.1: The business income derived is highly dispropotionate to the business expenses incurred by the assessee. This is likely to attract scrutiny for the year under review.

Point.2: The Loss arising out of the business cannot be set off against the Income under the head salaries.

Point.3: You have not given the detailed break up of the salary received by your client in order to allow permissible deductions like HRA, conveyance, transport, medical reimbursement etc.

Point.4: You have not mentioned whether the house for which he is claiming interest and principal & interest repayment is self occupied or let out, if let out what is the amount of rent derived by him.

Point.5: The maximum amount permissible for housing loan repayment, LIC and other savings is maximum of Rs.1.00 Lakh, additionally you can can Medical insurance premia paid u/s.80D.

Point.6: You have not mentioned what treatment was undergone by the assessee's father since there are two separate section viz.80DD & 80DDB for dealing with such treatment based on the ailment of the assessee's father.

Point.7: The assessee needs to file his return in ITR 4, however, unfortunately you have missed the deadline of the due date and the return filed by you will be treated as belated.