Section 44ADA is inserted after section 44AD of Income TAx Act, 1961 with effect from financial year 2016-17 and provides Special provision for computing profits and gains of profession on presumptive basis for Certain professionals referred to in section 44AA(1) of Income Tax Act whose total gross receipts from profession does not exceed Rs. 50 lakhs in a financial year.
Extract of Section 44ADA
Special provision for computing profits and gains of profession on presumptive basis.
After section 44AD of the Income-tax Act, the section 44ADA shall be inserted with effect from the 1st day of April, 2017, namely:—
44ADA. (1) Notwithstanding anything contained in sections 28 to 43C, in the case of an assessee, being a resident in India, who is engaged in a profession referred to in sub-section (1) of section 44AA and whose total gross receipts do not exceed fifty lakh rupees in a previous year, a sum equal to fifty per cent of the total gross receipts of the assessee in the previous year on account of such profession or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the assessee, shall be deemed to be the profits and gains of such profession chargeable to tax under the head “Profits and gains of business or profession”.
(2) Any deduction allowable under the provisions of sections 30 to 38 shall, for the purposes of sub-section (1), be deemed to have been already given full effect to and no further deduction under those sections shall be allowed.
(3) The written down value of any asset used for the purposes of profession shall be deemed to have been calculated as if the assessee had claimed and had been actually allowed the deduction in respect of the depreciation for each of the relevant assessment years.
(4) Notwithstanding anything contained in the foregoing provisions of this section, an assessee who claims that his profits and gains from the profession are lower than the profits and gains specified in sub-section (1) and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (1) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB.]
Analysis of Provisions of New Section 44ADA
| Why this section is proposed? |
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| How this is sought to be achieved? | This is sought to be achieved by inserting Section 44ADA in the Income Tax Act |
| Who is the eligible assessee? | Resident assessee who is
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| Who are the beneficiaries? | Certain professionals referred to in section 44AA(1) of the Income Tax Act whose total gross receipts from profession does not exceed Rs. 50 lakhs in a financial year. |
| Who are the eligible professionals? | Persons engaged in any of the following professions:
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| How much is the presumptive income to be offered? | Higher of:
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| Benefits of following this proposed section |
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| When shall the assessee be required to maintain books and to get the accounts audited? | If both the following conditions are satisfied, maintenance of accounts and audit are warranted:
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| If the assessee follows this section, following items shall be deemed to be allowed |
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| Effective date | The new section is proposed to be effective from 01.04.2017 (i.e. from Assessment Year 2017 – 18). In other words, advance tax in financial year 2016 – 17 may have to be calculated accordingly. |
| Author’s notes |
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(Author can be reached at [email protected])
(Republished With Amendments)
Can a airline Pilot avail the presumptive taxation scheme under Section 44ADA of Income tax Act
if a person providing export consultancy basis his academic skill or experience and charging commission on fecilitation of exports business , can he be covered under this section ?
Can an LIC agent is allowed to file the tax return U/s 44ADA if the total receipts is less than 50 lakhs?
If an assessee availed presumptive u/s 44AD scheme For 5 continuous years Is he eligible for further years?
If I am consultant as a doctor in any hospital and also I have a clinic . Aggregate income from both the source exceed 50 Lakh . Will I have right to take benifit s of 44 ADA because there is not any clarification about the same
good one
Is Marketing Consultancy charges comes under 44ADA?
iF OPTED FOR 44ADA, TILL HOW MANY YEARS THIS OPTION NEED TO FOLLOW?
My wife is a Doctor employed in State Govt. In addition to salary, she is getting fee for supervising examinations. They pay fee after deducting TDS u/s 194J .It is only small amount below Rs. 20000/- . Till now she is filiny ITR 1. Whether she can now file ITR 4 under sec 44ADA. If so merits & demerits. Please give me an answer
Sir I am retired from a bank n getting monthly pension of Rs.45000. Now I am working as consultant in a mutually aided cooperative society and I am paid Rs.60000/-per month as consultancy charges. Can I declare this income under section 44 A D A and show 50%if income?
Will a Sports person(Cricketer) can adopt sec.44ADA?
Please clarify
Post retirement, i am operating as a Freelance HR consultant and am advising a couple of firms and in receipt of remuneration for the same. Do I qualify as a ” Professional ” and can i deduct my business expenses like Communication expenses, Travel/ Fuel bills, Lunch bills, purchase of stationary etc from such earnings.
2. Can I file a composite ITR?
3. Do I club this income with my Pension income, Interest income etc
4. Do i need any separate registration (as a firm) for the same?
Can you pls clarify where it is mentioned in Section 44ADA that LLP and pvt ltd companies are not eligible for presumptive tax benefits. That restriction is there specifically in 44AD but not there in 44ADA.
I’m a consultant doctor working in a diagnostic center and received Rs. 14lakh as consultancy fee in last financial year. Can I avail presumptive taxation under section 44ada and show Rs 7 lakh as net taxable amount?
PGBP Method ITR 4 total receipts 4.50 is there any tax will U/s 44aa
My brother is a choreographer ( providing dance classes) under which business code is he fall for itr 4 plz suggests
which type of small bussiness cover in 44ADA ?
reply as soon as possible
Is income from guitar playing in bar and restaurant can be shown by using Sec 44ADA
Can Engineer working as a Professor getting salary, Shall i file tax returned under sec 44ADA