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The new ‘Annual Information Statement’ is now made available to the taxpayer on the Income Tax portal for the Financial Year 2020-2021. The taxpayer engaged in carrying on business or profession needs to thoroughly understand the information category ‘Business receipts’ covered under ‘Annual Information Statement’.

The present article explains one of the important information categories of ‘Annual Information Statement’ that is ‘Business receipts’.

The different sources of information under the information category ‘Business receipts’-

The scope of ‘Business receipts’ is very wide. Accordingly, ‘Annual Information Statement’ covers information in the said category from various different sources. The sources from which information is collected under the ‘Business receipts’ category is explained hereunder-

Annual Information Statement – Business receipts

Categories Source of information Corresponding information made available to the recipient
Receipts from contracts The person liable to make payment to the contractor is required to deduct TDS as per provisions of section 194C. Accordingly, the person is required to furnish a quarterly return in Form 26Q covering details of TDS so deducted.

Details furnished under Form 26Q will be considered under the ‘Annual Information Statement’.

The contractor will be informed about the TDS deducted and details thereon via TDS certificate in Form 16A issued by the contractee (i.e. deductor).
Receipts like contract income; commission or brokerage income; professional fees as covered under section 194M An Individual or HUF making payment of receipts covered under section 194M is liable to deduct TDS @ 5%. Accordingly, such deductor is required to furnish a challan-cum-statement in Form 26QD within 30 days from the end of month in which TDS is deducted.

Details furnished under Form 26QD will be considered under the ‘Annual Information Statement’.

The person deducting TDS under section 194M will issue a TDS certificate in Form 16D to the deductee informing details of TDS deducted and other details thereon.
Receipts of professional fees or technical service fees The person liable for making a payment towards fees for professional and technical services; any remuneration/ fees/ commission to the director of a company; royalty etc. is required to deduct TDS as per provisions of section 194J. Accordingly, the person is required to furnish a quarterly return in Form 26Q covering details of TDS so deducted.

Details furnished under Form 26Q will be considered under the ‘Annual Information Statement’.

The deductor needs to issue a TDS certificate in Form 16A to the deductee covering details of TDS deducted and other details thereon.
Receipts of commission or brokerage The person paying income by way of commission or brokerage is required to deduct TDS as per provisions of section 194H. Accordingly, the deductor is required to furnish the TDS return/ statement in Form 26Q on a quarterly basis.

The details furnished under Form 26Q will be considered under the ‘Annual Information Statement’.

The deductor needs to issue a TDS certificate in Form 16A to the deductee covering details of TDS deducted and the amount of commission/ brokerage on which TDS is deducted.
Receipt of amount from e-commerce operator towards sales or services provided An e-commerce operator is liable to deduct TDS while making payment to an e-commerce participant as per provisions of section 194-O. Accordingly, an e-commerce operator is required to furnish a TDS statement/ return in Form 26Q on a quarterly basis.

Details furnished by the e-commerce operator under Form 26Q will be considered under the ‘Annual Information Statement’.

The details of TDS deducted and the amount thereon will be provided by an e-commerce operator to an e-commerce participant via TDS certificate in Form 16A.

‘Annual Information Statement’ processing of information under the information category ‘Business receipts’-

Different information so received under the information category will be processed under ‘Annual Information Statement’ in the following manner-

1. The receipts, as stated above, will be held taxable in the hands of the recipients; and

2. The same will be taxable under the head ‘Income from business and profession’.

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