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8% of Turnover is Deemed as Profit from Business
But Person may have some other incomes also like Income from Other Sources and Gross Total Income
These are to be taken into account while calculating Income Tax

Example 1A
Suppose a person has a small chemist business with monthly turnover of 400000 per month. He has also Interest Income of FD of 5000
What will be TDS deducted by company if

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 Example 1B

Suppose a person has a small chemist business with monthly turnover of 400000 per month. He has also Interest Income of FD of 50000 on which Bank has deducted 5000 TDS
What will be TDS deducted by company if

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Note:-
TDS under Section 194A is applicable if Interest paid by bank on FD is more than 10000
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 Example 1C
Suppose a person has a small chemist business with monthly turnover of 400000 per month. He has also Interest Income of FD of 50000 on which Bank has deducted 5000 TDS
He also has interest Income of 12000 on Savings What will be TDS deducted by company if 

-a-
Income Tax Computation

Particulars Amt
MONTHLY TURNOVER 400000
ANNUAL TURNOVER 4800000
   
PROFIT AND GAIN OF BUSINESS AND PROFESSION 384000
(MINIMUM 8% OF TURNOVER)  
INCOME FROM OTHER SOURCES 62000
GROSS TOTAL INCOME 446000
Less  
DEDUCTIONS 10000
NET TOTAL INCOME 436000
TAX 18600
REBATE 5000
NET TAX 13600
CESS 408
TAX+ CESS 14008
Less  
TDS 5000
Net Tax Payable 9008

Note:-
TDS under Section 194A is not applicable on Interest on Savings On Interest on Savings,Deduction available under Section 80TTA of Maximum 10000
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Example 2

Find tax in following cases

Particulars Case 1 Case 2 Case 3 Case 4 Case 5
TURNOVER OF BUSINESS 5000000 5000000 5000000 5000000 5000000
INTEREST INCOME ON FD 4000 4000 40000 40000 0
INTEREST INCOME ON SAVINGS 3000 13000 13000 0 13000
View Answer
  1. Practical Income Tax
  2. Income Tax for Small Business
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About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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