There is no any Standard Deduction of 1,10,000 from Income (from Profession) Tax ? can I not get this ?...?

First I do again more clear things : I am as a consultant... i have apointment leter but no any written contract from my company, I don't get any pay slips, I get amount in bank a/c.





There is no any Standard Deduction of 1,10,000 from Income (from Profession) Tax ? can I not get this ?





... if any person earns only 20,000 in a whole year... then he comes under 'Below Poverty Line' ... It means the government will take Taxe from this poor person also ? !!!!!!!





And if it is not taxable then why one should deduct TDS on this amount (as my salary is 10,000 pm). ? He can deduct TDS only on 10,000 (@10.3%) isn't it ?





Is it Rule by Govrment to deduct TDS if income (from profession or any source) is not exeeds limit?





I am very confused on this matter Please explain this.

There is no any Standard Deduction of 1,10,000 from Income (from Profession) Tax ? can I not get this ?...?
First and foremost, In Income tax terms, you are not an employee of the company u r working for but a "FREELANCER" and in all such cases rules stipulates that TDS has to be deducted @ 10.30% u/s 194J of the IT Act 1961.





But that does not mean that even if ur TAXABLE INCOME is less than 1,10,000 u have to pay any tax !!





Just consider this "Deduction" as "advance to government" and at the end of year you can claim back/get refund of this "DEDUCTION" by filing the return. You will also get interest on the refund.





I hope this will clear all your doubts.





Further, there is no more the concept standard deduction now. And in your case (being a freelancer in income tax paralance) has many other advantages which a "SALARIED" person may not have.





CA. Deepak Bholusaria
Reply:If u have earned only Rs 20000 in whole year then as per ur question you have worked only 2 months ( Rs 10000 pm * 2 ).


you were free to work some where else for rest of 10 months. so no need to compare urself with BPL peoples. they work for whole year ( 12 months ) and yet not earn Rs 20000. hence they are considered in below poverty line . they need not pay taxes.





income from certain professional services is considered taxable and hence tds is required to be done on these incomes.


however if u are not earning above taxable income. you file ITR and get refund on "taxes" deducted of ur income