Greetings-I’m a student but having an online business with clickbank, I have a site where people pay to download a medical information ebook.The sale is by affiliates that get 75% commission for the visitor that buys.I get paid bi-monthly by cheque by clickbank sometimes for 2,500$ even.My query is will I have to declare myself as a business owner/service-provider or professional?.Also will IT investigate my business and cause legal problem or should I simply maintain proper accounts-and how do I account for the sales?.Will I have to give them printout of the receipts or otherwise give .csv files since it is all internet based. I would sincerely appreciate your advice. Samuel.A , Mumbai

First of all , you should note that you are liable to be taxed under the I T Act in FY 2008-09 only if the total income exceeds Rs 1,50,000 and you are liable to file return of income only if your gross total income exceeds Rs 1,50,000. Therefore, first ascertain the income from 1/4 2008 to 31/3/2009.

Since you are getting commission from clickbank or any other advertiser network  , it means that payment is received by you through banking channel. Then, the reason for such receipt is also provided to you . So , in case you are ever required to explain your receipt of income, it can clearly be explained. Therefore , there is no question of hiding any thing.

Yes, you are carrying on a business of commission, however there is no prescribed books of accounts for commission earning. Just keep the CSV file of the transaction details or payments from click bank.

Also remember , you can reduce expenses which is incurred for earning the income. For example , the expense on setting up of website, internet charges etc. So reduce those expense from gross receipts.so, computation will be as under

Gross Receipt of commission during 1/4/2008 to 31/3/2009                        XXXXX

Less

Internet charges                                      XXXXX

Web site  hosting fee                               XXXX

Depreciation on computer                        XXXX

Depreciation on Car/vehicle                    XXXXX

Office rent (if any?)                                   xxxx

                       Net receipt                                                                    ZZZZZ

If ZZZZ i.e Net receipt exceeds Rs 1,50,000, only then you are required to file return . The return form is ITR-4.