I normally file ITR-2 and my salary income is above 50 lakhs.
I paint as a hobby. Last year I was commissioned to do 2 paintings for which I received about 1 lakh. I assume I will have to file ITR-3 ? How should I report this on the ITR. Will this be considered income from a profession or a business? Can I use the presumptive scheme ? Am I allowed to claim any expenses? I have not kept records of amounts spent. Will I be required to prepare financial records in case I get any questions later ?
Hi @Noob
Since you have received income from the sale of your paintings, you can report it as a business income and hence file ITR 3. You can opt for the presumptive scheme u/s 44AD showing it as a business if your turnover is up to ₹ 2 crore in FY 2022-23.
However, if you opt for the presumptive scheme, you need not prepare any financials, but you will not be able to claim any expenses.
Read more about Section 44AD - Presumptive Taxation for Business - Learn by Quicko for your reference.
Thank you. Since the income from painting is only about 1% of my total income and from a hobby rather than a real business , can I just file ITR-2 and show the total receipts as other income if I don’t mind not claiming any expenses?