I retired on 31.08.2008 and was retained by my company on retainership (on contract) from 01.09.2009. Privileges such as house rent allowance, conveyance, and travel allowances were stopped from 01.09.2008. Please advise whether I would be eligible for exemption for such expenses during my contractual period from 01.09.2008 to 31.03.2009.
From India, Ahmadabad
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1From India, Ahmadabad
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Dear Sir,
When a person is taken on a retainer basis, a lump sum is paid (after deducting tax at the source) to him as "fees" without any break-up into various allowances. You would not get an exemption for the various expenses under the head salaries for the period of the retainer agreement. In this case, you would need to prepare your balance sheet, and the amount of profit would be taxable.
Hope this helps you.
Thanks & Regards,
Avika Kapoor
From India, New Delhi
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When a person is taken on a retainer basis, a lump sum is paid (after deducting tax at the source) to him as "fees" without any break-up into various allowances. You would not get an exemption for the various expenses under the head salaries for the period of the retainer agreement. In this case, you would need to prepare your balance sheet, and the amount of profit would be taxable.
Hope this helps you.
Thanks & Regards,
Avika Kapoor
From India, New Delhi
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Dear Avika Can I deduct expenses incurred in attaining the retainership: for example I have to stay in another city, other than city of origin. from the total income for computation of tax?
From India, Ahmadabad
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From India, Ahmadabad
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Your income from this retainership setup would actually fall under the head "profits and gains from business and profession" under the income tax provisions. You would need to prepare a profit & loss account and a balance sheet, and you can claim all the expenses as deductions that you incur for earning the income.
Hope this information helps you.
Thanks & Regards, Avika
From India, New Delhi
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Hope this information helps you.
Thanks & Regards, Avika
From India, New Delhi
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Expenses Report Sheet.xls
Gratuity - Taxation Issues.docx