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Retiring to consult

T. Banusekar

I WORK for a private limited company. I propose to take VRS and be a consultant to a public sector undertaking. I will be receiving a consultation charge of Rs 2.5 lakh a year. How will this be taxed?

S. V. L. Narayanan

Reply

The consultancy charges will be taxed as `Profits and gains of business or profession' if you are not in employment with the public sector undertaking.

Against the consultancy income you can claim the expenses incurred wholly and exclusively for the purpose of carrying on the business or profession.

You can also claim the other eligible expenses under Sections 30 to 36 of the I-T Act.

Mail your queries to taxtalk@thehindu.co.in or by post to Tax Talk', Business Line, Kasturi Buildings, 859, Anna Salai, Chennai-600002.

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