How Income From Taking Private Tuition Classes May Be Shown in Income Tax Returns?

 

ITR

With the advancement of education and technology, the conventional study habits of children are changing rapidly. Now days, Parents of students and students themselves prefer either private home tuitions, private tutions or online tuitions. There are many people who give private home tuitions or online tuitions as their main profession and likewise there are many people who do tuition work as part-time work. Now the question is whether Income from Private tuition is taxable in India and if yes then under which head it is taxable and which ITR is applicable to tutors.

This Blog will guide you about the taxability of tuition income and ITR for Tuition Income.

 

Whether Tuition Income is Taxable under I-T Act, 1961?

The first question related to Income From Private Tution is that whether income from tuition is taxable in India. The answer is Yes. The person may file Income Tax Return and shall be liable to pay taxes if his total income exceeds the maximum amount not chargeable to tax in a financial year.

Now the question arrises income from tuition fees which ITR Form is applicable.

 

Under which head of income, the tuition income is required to be taxed?

Next question is tuition income taxable under which head. The tuition income can be taxed either as “Income from Other Sources” or “Income from Business/Profession”. The head of income of tuition income shall depend upon the main source of income of the taxpayer.

The tuition income shall be taxable under the head Income from other sources when the main source of income of the person is not tuition income but any other source of income like salary, house property etc and tuition income is an additional income. In these cases when the main source of income is other than tuition income then tuition income shall be charged under the head “Income from Other Sources”.

Whereas, the Income from Private tuition shall be taxable under the head “Income from Business/Profession” when the income from tuition is the main source of income of the person.

 

Whether a person earning income from tuitions is required to file ITR?

Yes. As a general rule of income tax, when the income of a person earning income from tuition or/and from other sources exceeds the maximum exemption limit not chargeable to tax in a financial year then such person must file the Income Tax Return. However, a person can also file ITR even if his income is less than basic exemption limit at his own will.

 

Is it mandatory for a Tutor to maintain books of accounts?

Maintenance of books of accounts depends upon the total income or profits earned from tuition. The tutor shall mandatorily maintain books of accounts when

  • His total net profits (total income – total expenses) from tuition is more than 1,20,000/- in a financial year, or
  • His total receipts from the tuition exceeds 10 Lakh in any of the 3 financial years immediately preceding the financial year under consideration.

Thus, the tutor is not required to maintain proper books of accounts in any other case.

 

What records a Tutor need to maintain for Income tax purposes?

There is no specific section of Income-tax Act, which describes the records required to be maintained by tutors. However, generally, a tutor should maintain a register containing details of students. In such register, the tutor can provide basic details related to home tuition like Student name, amount of fee, date of fee payment, mode of fee payment that is cash or bank or any other and student/ student’s parents contact details.

In case the tutor accepts or receives fee by cash then he must deposit the fee received in cash in a separate bank account. It will ensure the transparency and reliability of books and account.

 

What expenses can be claimed by a Tutor for income tax purposes?

The next question after tuition income taxable under which head is that What expenses can be claimed by a Tutor for income tax purposes. A tutor can claim following expenses as deduction in order to save tax liability –

  1. Cost of stationary that is used by a tutor for tutoring purposes.
  2. Cost of advertisement made for promotion of tuition.
  3. Cost of photocopies or printing of notes used for teaching.
  4. Depreciation on furniture on any asset used for tuition.
  5. Cost of books, journals or any academic material used by the tutor.
  6. Any other cost directly involved in tutoring such as electricity.

 

Conclusion

Tutoring has become an emerging profession. If you are also a tutor and you are searching for the taxability of tuition income and which ITR for Tuition Income then this blog will help. In case of any further query related to taxability of tuition income or tuition income taxable under which head or any other income tax query then you can contact Your Trustworthy Advisors Manthan Experts just by dialling +91 9643969969.

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Knowledge Source:

TDS on Purchase of Goods | Section 194Q w.e.f. 1 July 2021

Haven’t filed income tax return? You may face higher TDS on interest, other incomes

Step-By-Step Guide To Use New Income Tax Portal 2.0

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