My income come under professional income (44ADA) or business income (44AD)?

Hi,

Hope you are doing well !

Commercial coaching service is not covered under 44ADA.

The following are considered as professionals who can make use of this Section:­

1. Legal

2. Medical

3. Engineering

4. Architectural Profession

5. Profession of Accountancy

6. Technical Consultancy

7. Interior Decoration

So you can not take 44ADA.

You can use section 44AD for filing your ITR.

Thanks & Regards,

Payal Chhajed

Hi,

If the income is derived from the professions as specified under section 44ADA then only the income shall be treated as Income from profession and taxed under section 44ADA.

As computer Job work and Income from Coaching are not specified as profession under section 44ADA your income shall be classified as business income.

As per section 44AD you need to disclose minimum of 8% profit of the total turnover.

You need to use code:

14010 - Other computation related services n.e.c. for Job work and

17006 - Coaching centres and tuition’s for Tuition Income.

Hope your queries are resolved!

Hi,

You need to use following codes:

Coaching - 17006.

Computer Job Work(DTP) - 14010.

Both are covered under business income (44AD). Profits assumed at 8% of Sales for Businesses with Turnover of less than Rs 2 Crores per annum.

In case where all incomes are digitally earned i.e earned via cheque, NEFT, RTGS or any non cash mode, profits shall be assumed at 6% for turnover less than Rs 2 crores.

Thanks & Regards,

Payal Chhajed

Dear Sir,

You are eligible for presumption taxation scheme under section 44AD.

Section 44ADA is available for only eligible profession and your services are not covered under eligible profession.

Business Code for Computer job work - 14010

Business code for Coaching/tuition- 17006.

Warm Regards,

Karishma Chhajer

Hi

You cannot claim section 44ADA as it is not an eligible profession.

At the same time, since it is a profession and not a business, you cannot claim section 44AD as well.

You need to fill up all the income and expense details and declare profits accordingly on which tax has to be paid.

Business code for tuition - 17006

Business code for computer job work - choose between 14001 to 14010 as applicable to your type of work.

Dear Sir,

- Income from both the sources should be shown under the head business income only.

- In case of Computer job work, inventory should be material used in job work.

- You can avail the benefit of section 44AD but remember you have to opt section 44AD for next five years also otherwise you need to maintain books of accounts and get them audited.

Thanks

ok

You can keep it to Zero.

There shall be no inventories in your case.

Mention '0' for inventories.

Hi,

You can simply put zero in inventory column.

Thanks & Regards,

Payal Chhajed

Hi,

You cannot use section 44ADA since computer job work and coaching are not included in the specified profession u/s 44 ADA.

You can use section 44AD and disclose minimum of 8% profit of the total turnover.

You need to use code:

14010 - Other computation related services n.e.c. for Job work and

17006 - Coaching centres and tuition’s for Tution Income.

Hope this clarifies.

Regards,

Nikhil.

Hope that clarifies. Please let me know in case of any clarifications.

Hi,

In my opinion, your business is neither eligible for section 44AD nor for 44ADA.

You should file ITR 3 under normal provision of income tax act by filling up profit and loss and business income. You can select two codes in nature of business

You can put zero under the inventory.

Hi

It will be taxable under 44ad business income.

In inventories nil should be filled.

Code for coaching can be 17006

code for job work can be 14010

Hope it resolves your query

Dear Sir,

You can put zero in inventory column.

Warm Regards,

Karishma Chhajer

It is not compulsory to show inventory in a business. you can show your inventory as "0"

Your income comes under 44ad