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Navin Talati   13 July 2024

Where to show casual income in itr-1 - any circular for this?

Sir,

I need your guidance in the following matter.

I am a retired pensioner. The ITR-1 is applicable to me.

Being a technical person, I may get some consultancy and hence earning opportunities casually (Not on regular basis). If I get such an opportunity and earn some amount  (which is a casual income and not a regular income) , In this regard, please guide me that  as and when I get some income from this activity, where should I show this income in ITR-1 and in which column?     Is there any appropriate CIRCULAR for this? 

Awaiting your valuable advice & guidance.      

Regards.



Learning

 4 Replies

kavksatyanarayana (subregistrar/supdt.(retired))     13 July 2024

You can show it under "others" (consultancy fees.  It is better to consult a local CA or put this query in CAclubindia.

T. Kalaiselvan, Advocate (Advocate)     13 July 2024

Since this is not a regular income neither it is a salary income, you may show them in the income from other sources column of your ITR 

Rama chary Rachakonda (Secunderabad/Telangana state Highcourt practice watsapp no.9989324294 )     14 July 2024

For consultancy income that is irregular, it's preferable to file ITR-3 (Income Tax Return-3) for the following reasons: 1. _Business income_: ITR-3 is meant for individuals and Hindu Undivided Families (HUFs) with business income, which includes consultancy income. 2. _Irregular income_: ITR-3 accommodates irregular income, such as freelance or consulting work, which may not have a fixed schedule or regular payments. 3. _Expenses and deductions_: ITR-3 allows you to claim expenses and deductions related to your consultancy work, which can help reduce your tax liability. 4. _Audit and scrutiny_: ITR-3 is more likely to be selected for audit and scrutiny, which can provide an opportunity to explain and justify your income and expenses. While ITR-1 (Sahaj) is a simpler form, it's meant for individuals with income from salary, house property, and other sources, but not business income. ITR-4 (Sugam) is for presumptive taxation, which might not be suitable for irregular consultancy income. Consult a tax professional or chartered accountant to ensure you're filing the correct ITR form and taking advantage of applicable deductions and expenses.

Navin Talati   15 July 2024

Sirs,


Many many thanks for very quick reply from your wends.


Sir, my confusion is still there that Income occurred due to casual (i.e. not in regular basis) Technical Consultancy seems not included as "Other" income in ITR-1.

For your ready reference, I am giving you the following detail:
------------------------QUOTE--------------------------------
What is Casual Income in Income Tax?
In income tax parlance, casual income is an extra financial boost that cannot be relied upon as a steady stream of revenue. It represents a one-time occurrence and does not fall under any contractual agreements or future expectations. Casual income is unpredictable, defying any established patterns or distributions. Furthermore, it encompasses any unforeseen and unscheduled inflows of money.
While understanding the meaning of casual income, it is important for you to understand some of its key provisions. These are:
• Any expense related to a casual income is not deductible. If you incur any cost to earn casual money, it will not get deducted from any earnings. For instance, the cost of buying a lottery ticket will not be deducted from the income received against it.
• As per Section 194B, winnings from things like lotteries, card games or crossword puzzles are subject to TDS (tax deducted at source) if they exceed Rs.10,000. The effective TDS rate is 31.2%, including cess and surcharge. The organisation distributing the prize money is responsible for deducting TDS.
• You are not permitted to set off any losses. If you have any casual loss instead of income, the amount will not be subtracted from any of your income.
Example of Casual Income
Examples related to casual income encompass the thrilling realm of winnings, such as lottery jackpots, quiz shows, poker games, successful sports betting, crossword or other puzzle-solving, and various other stimulating games of chance. Lotteries offer an opportunity for individuals to strike it rich by claiming prizes through draws or sheer luck.
--------------------UNQUOTE-------------------------------------------------------
This detail is confusing me as the captioned type income is not mentioned. I also refer ITR-1 and concerned column of "Other" income, but this type of income is not mentioned therein.

Further guidance requested.....please.
Thanks in anticipation.


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