Income to be declared under which for perquisites u/s 194R from Co.

[Venkatesh Dhongadi]

A dealer went to foreign trip on scheme purchases from company. And company has done TDS u/s 194R. Books of accounts are not maintained and ITR is required to filed u/s 44AD of Income tax act, 1961. Perquisites received from company (Foreign trip) to be shown under which head of Income - Business Income or Other Sources?

[johan kill]

Hi Venkatesh,

In this scenario, the perquisites received, such as the foreign trip, would typically be treated as business income under Section 28 of the Income Tax Act, especially if the trip is related to the dealer’s business activities. Since the dealer is filing under Section 44AD and the trip is tied to purchases from the company, it is likely considered a business benefit. However, if the trip is purely personal, it could potentially fall under 'Other Sources' depending on the facts of the case.

It would be a good idea to consult with a tax professional for specific advice tailored to the situation, but based on the information you’ve provided, business income seems like the more likely classification. Hope this helps clarify things.

AI Summary

Perquisite classification: business-related benefits treated as business income, personal benefits classified under other sources for tax. Classification of a company-provided foreign trip hinges on nexus with the dealer's trade: when conferred in relation to purchases or other commercial dealings it constitutes business income; if purely personal and unconnected to commercial operations it constitutes income from other sources. The factual purpose and commercial nexus determine tax treatment despite the dealer's presumptive taxation status and lack of formal books.