Tax Query: Can I claim deduction for expenses from commission income?

I run an agency for online travel bookings, including tickets and accommodation. I receive a commission income from the services of online booking. For FY 2019-20, I received my commission income after deducting a TDS of 5%. I had also incurred expenses on running and maintenance of an office for the travel agency. Can I claim deductions for the expenditure and the TDS?

Your commission income from the business of online travel booking gets taxed as income from a business. In calculating your business income, you can claim a deduction for expenses of running the business. The expenditure can include rent and other maintenance expenses for the premises, salary for staff, amongst others. Thus, you are eligible to claim all expenditure you incur to carry on the business. 

You can claim the TDS or tax deducted on your commission income while filing your income tax return. The TDS does not form part of your business expenses. You can claim a tax credit of the TDS against the income tax payable during the filing of your tax return.

Also Read: Tax Query: Is rental income taxable for the recipient or the owner?

My salary income for the FY 2019-20 is about Rs 10 lakh. I also incurred a short-term capital loss on the sale of listed equity shares of Rs 50,000. Can I claim a deduction for the short-term capital loss while filing my income tax return?

A sale of listed equity shares within one year of purchase gives rise to a short-term capital gain or loss. You cannot reduce the short-term capital loss from your salary income. 

You can reduce a short-term capital loss only from a capital gain, which may be a short-term capital gain or long-term capital gain. In case you have a capital gain during the year, you can reduce your short-term loss from such capital gain. The amount which you cannot set off is eligible for a carry forward to the next eight years. However, you must declare the short-term capital loss in the income tax return, and file the return within the due date.

For any clarifications/feedback on the topic, please contact the writer at sweta.dugar@cleartax.in