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 ssayyarandco@gmail.com)
(Republished With Amendments)
can an individual retained by an advertising agency and issued form 16A, file ITR 4 and claim under section 44ADA. Efiling tax site does not clarify. Main point whether can be covered ubder Technical consultancy or any other notified by CBDT under code 607
I am in LEGAL Profession. I do not maintain accounts. On what basis should I show my presumptive income? How do I work out my total receipts, to arrive at 50% as my Presumptive income?
I am a doctor. Have gross income of 28 lakhs per annum. At what amount I will calculate tax. Should I keep records/receipts of my expenditures ??
can i take deductions under chapter VIa u/s 44ADA
If i opt of presumptive taxation during the FY 2016-17 , is there any compulsion that i should follow the presumptive taxation scheme in the following years too?? Because from the next year on wards i will not be receiving any professional fees , but i will be receiving salary , so what should i do ??
Article says certain sports related persons covered u/s 44ada. Sports coaches, persons providing sports related consultancy covered u/s 44ada? How to know which sports related persons are covered? 44ada is applicable from ay 2017-18,i.e fy 2016-17,right? in the beginning, its said applicable from 1.4.2017. you mean to say returns filed from 1.4.17 for ay 17-18, right?
In a case of doctor, receipts are Rs 10 lacs, against which the actual expenses Rs 1.5 lacs resulting net profit works out to Rs 8.5 lacs. Regular books of accounts are maintained.
Please give your valuable opinion after considering the above facts:-
1. Can return be filed under section 44ADA by applying net profit rate @ 50 percent on total receipts OR
2. It will be better to file return on the basis of book results i.e. 8.5 lacs.
can the return be filed under section 44 ADA for commission income received from Amway.
My professional fees Rs. 5 lacs and expenses Rs. 1 lacs. Can I show taxable income Rs. 2.50 lakhs u/s section 44ADA.
conducting tuitions ..what sec.applies
I am getting my salary as professional fee. Employer has deducted TDS under 194(J). Whether I am eligible u/s 44ADA to file ITR-4
CAN A MUSIC TEACHER FILE HIS RETURN UNDER 44ADA
If the professional receipt are less than Rs. 25 Lacs than I want to know whether audit is required under section 44ab of income tax act. I want to know whether sec 44ada is applicable only to those firms who’s receipt are more than25 lacs but however less than Rs.50 lacs
I am a computer professional but have not done well in business (working individually) this year and have earned about 6 lakhs total income. My expenditure has been about 4.5L related to earning this as I had to invest in consultants to get a job done but unfortunately did not get paid by end clients.
Now my CA says that you have to indicate 50% profit or undergo an audit which will cost about 10,000 Rs.
Basically I am already in a loss having earned hardly 1L.
Why should I have to spend 10000 Rs to audit my accounts when all income and expenditure are via cheques and I have bills and receipts to support them and there are no cash transactions.
Why is the government forcing us to undergo audits for a turnover of Rs 6L. Its not that I have made a turnover of Rs 25 Lakhs and above where I can afford audits etc.
In addition to 6L turnover I have earned 5L in fd interests and bank interests and already banks have deducted tds for the same.
6L turnover in nothing nowadays..Why should I not be allowed to file my tax returns in a normal way..Its very sad that the government is forcing entrepreneurs to an audit for a small sum of 6L of turnover.
The Income tax department should go through my tax filing and if they think its necessary should request me for an audit report…When its obvious to them that the details reported are genuine and reasonably OK they should go ahead and settle my filing thus saving me Rs 10,000 CA charges
Please advise how I can save this 10000 audit fee
Thanks
My Gross earnings for 2016-17 is 7.2 Lakhs and my TDS deduction was 72K.
While submitting ITR form 4 in Income tax site, it gives the following error message and I am unable to submit return.
“Details of receipt as mentioned in Form 26AS should not be less than twice of the amount of tax deducted”
I running a catering services my turnover annual approximate 4800000 i file itr 4s and we declare our taxable income 8 % and we take claim 80 c or not please confirm us
If Gross receipt exceeds Rs 25,00,000, on the one hand He is liable to audit u/s 44AB, then how he can claim benefit of Sec 44ADA because sec 44ADA does not override sec 44AB.
In this case, Despite Gross receipts is less than Rs 50 lakhs, even then He can not claim benefit of sec 44AB. I think there is conflict between sec 44AB and sec 44ADA
Dear sir, i am professionally doctor i geting salary 7.5 lakh they will make TDS u/s 192 and i worked as a consoltent i got 5 lakh they deducted u/s194j my question is can i opt 44ADA or not ? Which form should submited ITR 1 or ITR 4 ? And what about maintaining books of account ( i opt more than 50% of gross receipt & exceding basic examption limit )
Can lic commission agent income cover u/S 44 ada. Please give response
1. Person who performs as a violinist for various events. Can he file his returns u/s 44ADA
2. Person who plays professional sports for a club which partcipates in the official league of India. Can he file returns u/s 44ADA.
I am an Engineering Professional and working as a consultant on contract basis.
Now, as per norms, I have to fill Form-ITR-4. And now in the section 44ADA, can I directly claim 50% (or some more) as my net gains/earnings and only that portion is chargeable?
Whether any proofs required for this 50% deduction.
I have got Form 16A..
An individual having Income form Insurance Commission can file his return of Income u/s 44ADA or 44AD. Please suggest.
an HUF having professional income below Rs 50Lac can file his return of Income u/s 44ADA Please suggest.
Under 44ada , Can partner get deduction for salary and interest
Confectioner in come is cover in 44 ADA ?
LIC AGENT COVER UNDER 44ADA????
Hi, I am having gross income of 3 lakhs for FY 2016-17 and I have received 2.4 lakhs after deducting PF and TDS.
Can I mention gross receipt 3 lakhs u/s 44ADA and 2.4 lakhs as Presumptive income under section 44ADA.
Which ITR form should be used for filling ITR U/s 44ADA
As per bare act it is applicable to all resident assesse which means applicable to LLP also (which i think you have wrongly mentioned).
Can you clarify from where u came to know it is not applicable to LLP
Gaurav Jain
As per Author’s Note:
“Businessmen covered u/s 44AD are permitted to pay the whole of advance tax by March 15. But no such concession is seen vis-à-vis a professional covered under 44ADA. That is to say, all the four installments may be paid”
As per Section 211(b) of Income Tax Act:
[an assessee who declares profits and gains in accordance with the provisions of sub-section (1) of section 44AD or sub-section (1) of section 44ADA, as the case may be], to the extent of the whole amount of such advance tax during each financial year on or before the 15th March
All Four Installments are not applicable for Professsionals falling under 44ADA!!
Section 44ADA does not override Sec 44AA, then how do we say professionals opting for 44ADA need not maintain books of account as per sec 44AA.
Is it because sec 44ADA(4) provides for maintenance of books for assessees with income lower than deemed 50% and exceeding minimum tax slab?
I fail to see how 44ADA(4) overrides 44AA, and exempts professionals from maintaining books of account.
What kind of doctors are eligible in Section 44ADA?
Naturopathy and physiotherapist can avail this presumptive tax ?
Commission agent who sale Vegetable and Fruit at Commission, can he adopt this benefit of assessing u/s 44 ADA
Can management consultant avail this scheme of U/S 44ADA( 50% income for computing income tax)?
my question is if the owner of restaurant has to pay tax @ 50% or not
Sir,
If the assessee is Real Estate agent, can he adopt this benefit of assessing u/s 44 ADA
The way u have projected this section is totally awesome its so easy and simple for understanding thank you so much for this
Where does the language of this section say that it is not applicable on LLP?
is Partner getting remuneration from a professional firm is also eligible to take the benifit of Section 44ADA? If so, lets assume, remuneration from a professional firm is 10 lacs and interest on debit balance in capital is (-) 1 lac. Is the gross receipt in this case 9 lac? is this eligible to be taxed at 50%?
technical consultancy includes what kind of technical consultant service???and just wanted to know whether a managing graduate who acts as a consultant in a company rather than an employee…whether this sec is applicable to such person or not????????
I m not clear that income of Rs 50 Lakhs or more when less than 50% of the gross receipts!. So what is income differentiated from receipts?
Which ITR FORM I SHOULD USED FOR FILING REUTRN u/s 44ADA.
Whether I should show 100% Income or 50% income in the column of total income
A doctor running hospital, whether this section would applicable on him ???
The article mentioned that “Certain sports related persons” are also notified by the CBDT as professionals.
Please provide the source of information of the same i.e. Circular/ Notification etc.
Thank You
I believe CA’s taking classes for CA students may show their income from such activity under profession eligible u/s 44ADA. Please respond
HI B.COM GRADUATE IS ELIGIABLE TO FILE HIS RETURN UNDER THIS SCHEME.
does that means a CA has to get his accounts audited by another ca?
CAN REMUNERATION GIVEN TO PARTNERS BE CLAIM UNDER SECTION 44ADA
is it possible to deduct 80 c 80 d ETC in case a professional adopts 44ada
I was asked what was the recommendation of justice Easwar Committee
Please click the link – Page 20 – Para 5
https://taxguru.in/income-tax/summary-draft-report-easwar-committee-simplify-provisions-incometax-act-1961.html