| If you run your own business venture, and you are the proprietor, then the income from the business is taxed in your hands. This also includes income from professional services such as that of a practicing doctor, lawyer, consultant and so on.
The books of accounts required to be maintained are:
 Cash book
Journal
Ledger
Carbon copies of machine numbered or serially numbered bills and receipts
Then comes the process of arriving at taxable income. This is not very simple. The reason being, that you can deduct a number of expenses before arriving at taxable income. The following are the main deductible expenses:
Rent, local rate, municipal taxes, repairs and insurance for business premises
If you are using your own residence for running your business, then proportionate expenses will be deducted.
Repairs and insurance of machinery and furntire
Depreciation
Depreciation is allowed in respect of building, machinery, furniture, computers and other assets as specified in the Income Tax Act
Insurance on health of employees
Bonus paid to employees
Interest on loan taken for the purpose of the business or profession
Contribution made towards provident fund or gratuity fund
Bad debts
Entertainment expenditure
Advertisement expenditure
Traveling expenses
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If you are
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A life insurance agent If you are earning an annual commission of less than Rs 60,000, then the deduction is ad hoc. 50% of the commission for the first year premium and 15% for renewal premium is deducted. In case of single premium policies sold, 33.3% of the commission is deducible.
If you are earning commission more than Rs 60,000, then the assessing officers will decide the amount deductible from income.
Mutual fund agent or post office agent
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