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Ghanshyam ParmarPresumptive taxation under Section 44AD

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[h1]Presumptive taxation under Section 44AD[/h1]

Section 44ADA for Professionals :



Presumptive taxation for professionals at 50%
Presumptive taxation under Section 44AD, which was only available to businesses, has now been extended to include professionals effective from FY 2016-17. This is covered under Section 44ADA. Professional with receipts of Rs.50 lakhs or less can opt for this scheme. This also covers freelancers who do technical assignments such as website design or software development.

Section 44ADA



Section 44ADA extends the benefit of presumptive taxation to professionals, which was only available to specific businesses before. Section 44ADA allows professionals to adopt the provisions of presumptive taxation scheme provided their gross receipts for the financial year do not exceed Rs.50 lakh. Below are the professionals who can avail the benefits of presumptive taxation under this section:
Engineering
Legal
Architectural profession
Accountant
Medical
Technical consultant
Interior business

Section 44ADA Limits



Section 44ADA was introduced for small professionals with the objective to simplify taxation, reduce compliance burden and facilitate the ease of doing business for certain small professionals. It also aims at bringing parity between small businesses who enjoy Presumptive Taxation Scheme under Section 44AD and small professionals.

In case of a person adopting the provisions of section 44ADA, income will be computed on a presumptive basis, i.e. @ 50% of the total gross receipts of the profession. In other words, total gross receipts from profession should not exceed Rs 50 lakh for a financial year.
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