TIP taxability

[NAV HIND JAIN]

TIP RECEIVED IN HOTEL LINE IS TAXABLE UNDER WHAT HEAD

AI Summary

Taxability of Hotel Industry Tips: Business Income if Not Fully Distributed to Staff Under Tax Rule A query was raised regarding the taxability of tips received in the hotel industry. One response stated that tips are taxable under the head of business or profession. Another response clarified that tips received are typically payable to staff and should be recorded as receipts. If the entire amount is not distributed to staff, the remaining balance is considered part of the business income and reflected in the profit and loss account.