Income from Business and Profession refers to one of the five heads of income under the Indian Income Tax Act. It includes earnings generated by individuals, firms, or companies from any business activity (like trading, manufacturing, or service delivery) or professional services (like those provided by doctors, lawyers, consultants, or chartered accountants).
For tax purposes, this income must be disclosed while filing the Income Tax Return (ITR), and it's calculated after deducting all eligible expenses directly related to the business or profession. These can include rent, salaries, travel, depreciation on business assets, and other operational costs.
This head of income is relevant to anyone who is self-employed, running a proprietary concern, or involved in a partnership or LLP. Regular compliance includes maintaining books of accounts, issuing invoices, deducting and depositing TDS (if applicable), and filing GST returns when registered under GST. Depending on turnover, professionals and small businesses can also opt for presumptive taxation under Sections 44AD, 44ADA, or 44AE for simplified return filing.
Timely and accurate reporting under this head is essential not only for staying compliant with the Income Tax Department but also for accessing credit, attracting investors, or scaling operations professionally.
To understand how to manage your business or professional income tax filing more efficiently, you can explore tailored services at FinTax24.