Upgrad LLM

tax on lawyers/advocates

Advocate

Hello All,

I have jst joined this forum and was wondering if anyone could enlighten me as to the position of income tax for lawyers practicing in Delhi.

Also, how is the assessee's tax liability computed, based on his domicile or based on which state he is registered as an Advocate?

Thank you.

Joy
 
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Lawyer

Dear Friend,


Levy of income tax does not depend on domicile etc. It is universal throught the Nation. An advocate is treated as professional. He has to maintain account books.

 
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ADVOCATE & TAX CONSULTANTS

dear sir


As per Income Tax Act, 1961, the Person is assessed according to the status and his residential status in india for every financial year. it is not the matter the person so professional as an advocate and domecile in delhi.


professional income is chargeable under the head income from business and profession. 

 
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Advocate

Thanks everyone for your inputs. I was looking for some specific provisions/examples though.


Mr./Ms. Palnitkar, please see the reply to your post on the Lock-in Clause query.


Best.


Joy

 
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Advocate/Tax practitioner

As i of my learned counsel told that a assessee has to maintian a books of account  for a professional it is compulsory only in case it his income exceeds the exemption limit prescribed in income tax act. I T Act  1961  is Central Act & Comes under Direct Taxes. The prescribed schdule & rates are


Upto 150000/-   Nil


Above 150001 to 300000/-  At 10% + 3% Education Cess


Above 300001 to 500000/- At 20% + 3% Education Cess


Above 500001 to 1000000 /- At 30% + 3% Education Cess


Above 1000001 to Any amt At 30% + 10% Surchage+ 3% Education Cess.

 
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Advocate

Account is to be maintained by all professionals, i.e. doctors, CA, Advocates & architects irrespetive of their income. For other professionals, accounts is required to be maintained if income exceeds the exemption limit.


If the gross revenue exceeds 10 lakhs, the accounts are required to be audited.

 
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Advocate

I beg to Differ with the views of the learned members, kindly refer S.44AA of the Income Tax Act which deals with the provisions for maintenance of books of accounts . BELOW IS THE REPRODUCTION OF THE SECTION


[Maintenance of accounts by certain persons carrying on profession or business.


144AA. (1) Every person carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or any other profession as is notified2 by the Board in the Official Gazette shall keep and maintain such books of account and other documents as may enable the 3[Assessing] Officer to compute his total income in accordance with the provisions of this Act.


(2) Every person carrying on business or profession [not being a profession referred to in sub-section (1)] shall,


(i) if his income from business or profession exceeds 4[one lakh twenty] thousand rupees or his total sales, turnover or gross receipts, as the case may be, in business or profession exceed or exceeds 5[ten lakh] rupees in any one of the three years immediately preceding the previous year; or


(ii) where the business or profession is newly set up in any previous year, if his income from business or profession is likely to exceed 6[one lakh twenty] thousand rupees or his total sales, turnover or gross receipts, as the case may be, in business or profession are or is likely to exceed 7[ten lakh] rupees, 8[during such previous year; or


(iii) where the profits and gains from the business are deemed to be the profits and gains of the assessee under section 44AD or section 44AE or section 44AF 9[or section 44BB or section 44BBB], as the case may be, and the assessee has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, during such previous year,]


keep and maintain such books of account and other documents as may enable the 10[Assessing] Officer to compute his total income in accordance with the provisions of this Act.


(3) The Board may, having regard to the nature of the business or profession carried on by any class of persons, prescribe11, by rules, the books of account and other documents (including inventories, wherever necessary) to be kept and maintained under sub-section (1) or sub-section (2), the particulars to be contained therein and the form and the manner in which and the place at which they shall be kept and maintained.


(4) Without prejudice to the provisions of sub-section (3), the Board may prescribe, by rules, the period for which the books of account and other documents to be kept and maintained under sub-section (1) or sub-section (2) shall be retained


Further the Provisions for Tax audit are different and not related to S 44AA of the I T Act.


S.44AA prescribes the books to be maintained irrespective whether it is a Tax Audit or a non tax audit. S 44AB prescribes the assessees who required to to audited under the Income Tax Act. The exemption limit has no bearing on the maintenance of books under the provisions of S 44AA

 
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Advocate

Vishal is right. Every Advocate is required to maintain an accounts. The accounts are simple, just a statement of revenue and expenditure- where balance can be shown even on monthly basis.

 
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