What is referral income and how is it taxed
Referral income refers to the commission or incentive received by an individual for referring someone or a business to another individual or company. Referral income form of income is commonly earned by professionals in the sales or marketing field and it is taxed.
To visit https://www.gst.gov.in/
In India, income is categorized as commission income and is subject to taxation based on the applicable income tax slab rate for the individual. The commission earned is treated as part of the individual’s total income and is taxed accordingly.
To illustrate, let’s consider an individual who earns Rs. 50,000 as income during a financial year. If the individual falls under a 20% income tax slab rate, they would be required to pay Rs. They would need to pay Rs. 10,000 as income tax on their income.. It’s important to note that reporting that income is mandatory when filing the income tax return.
Please be advised that tax regulations and rates may vary, and it’s always recommended to consult with a tax professional or refer to the official guidelines for accurate and up-to-date information regarding taxation on referral income.
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