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Tax filing tips for Ola or Uber drivers
If you are running a business then Section 44AD presumptive income option is the easiest option for tax compliance. The section applies to all those running their own businesses and do not maintain their book of accounts. Under this section, from Ola or Uber driver to any small businessman with a turnover of less than Rs 2 crore can declare profits as a certain percentage of gross receipts.
People who opt for the presumptive income they need to le ITR-4. A doctor and an engineer who earns in excess of Rs 50 lakhs can also opt for presumptive income. The form also includes income from other sources, income from salary and income from house property.
Tax Tips for Ola or Uber Drivers
One can go for presumptive taxation under section 44AD if one does not have any books of accounts nor any evidence of income. Sudhir Kaushik, co-founder and CFO, TaxSpanner.com, says, “In that case, you may have to pay tax on 8 per cent of your Gross receipts received/ receivable during the year. The presumptive income would be 6 per cent if all the receipts are through electronic clearing.”
He adds, however, 44AD option cannot be availed in case the cab drivers are getting income as commission.
It is recommended that true prot should be declared and it can be more than 8 per cent which is under the presumptive scheme. Kaushik says, “The reason is to justify the car hire charges or EMI. If there is actual loss in taxi business than prepare prot and loss account/Balance sheet and le return with audit report.”
Common expenses which cab drivers can claim as a deduction:
1) Interest on a car loan, if you own
2) Fuel i.e. CNG or petrol/diesel cost
3) Car repair and maintenance
4) Fee paid to an association of your business
5) License cost
6) Car insurance premium
7) Rent/hire charges paid for a car, if you are not owning
8) Driver salary, if you are not driving or having 2 or more cab,
9) Any other expense incurred for running a business
(As published on India.com, July 23, 2018)