TaxTMI 
TaxTMI 
44 ad taxpayer
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....4 ad taxpayer<br> Query (Issue) Started By: - rajesh pandya Dated:- 20-4-2025 Last Reply Date:- 20-4-2025 Income Tax<br>Got 2 Replies<br>Income Tax<br>hi, I HAVE PROPRIETORSHIP BUSINESS. I WANT TO KNOW ABOUT IN PRESUMPTIVE TAX CAN SHOW SALARY TO WIFE OR SON OR DAUGHTER. THANKS Reply By DR.MARIAPPAN GOVINDARAJAN: The Reply: If your wife or son or daughter is receiving salary from your business i....
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....t will be an expenditure of the business. No separate procedure for this. Reply By YAGAY andSUN: The Reply: Yes, you can pay a salary to your wife, son, or daughter from your proprietorship business, even under the Presumptive Taxation Scheme (like u/s 44AD, 44ADA, or 44AE of the Income Tax Act). But there are a few important conditions and clarifications you should know: ....
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....8204; Presumptive Taxation Overview: Under sections like 44AD, you declare profits on a presumptive basis (e.g., 6% or 8% of turnover), and you are not required to maintain books of accounts. In this scheme, deductions for expenses (like salaries) are generally deemed to be included in the presumptive income. ❓Can You Show Salary to Family Members? ✅ Yes, You Can Pay Salary, But: ....
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.... * Payment Must Be Genuine: * Your wife, son, or daughter must actually work in the business. * Salary must be commensurate with their work (not excessive). * Allowed under Section 44AD/44ADA: * Even though you can't claim specific deductions, it is legally valid to pay family members for business-related work. * Their salary will not reduce your taxable income under presumptive tax (bec....
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....ause you're taxed on presumptive income), but it will be considered their income and taxed in their hands. * Avoid Clubbing of Income (Section 64): * If wife/son/daughter is just being paid to save tax and not actually working, then the salary may be clubbed back into your income. * If they genuinely work and have qualifications/experience, clubbing provisions will not apply. 🧾 ....
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....Example: * You are a shop owner under 44AD. * Your wife handles accounts, and you pay her Rs.10,000/month. * You declare 8% of turnover as income, and her salary is not separately deducted. * Your wife files her own return, showing Rs.1.2 lakh income. * This is valid, provided it's genuine and supported by basic records (like salary register, bank transfers). 🧠 Summary: Poi....
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....nt Allowed? Note Pay salary to wife/children ✅ Yes Must be genuine and reasonable Deduct salary separately under 44AD ❌ No Expenses are deemed under presumptive scheme Show it as their income ✅ Yes Will be taxed in their hands Avoid clubbing if not genuine ⚠️ Yes Section 64 may apply<br> Discussion Forum - Knowledge Sharing ....