• Taxable Income for non-salaried professional

I am a (male) professional working as a consultant (Expansion Director) for a non profit education organisation registered in the US. I live and work out of Mumbai, India. I receive my consultancy fee as a lump sum payment (in INR) into my bank account every month. I am a non-salaried employee since I have signed a consultancy contract that is indefinite (not time bound, can be terminated by both parties with due notice). I don't want to claim any business expenses as I don't have any - I work from home and whenever I travel my company reimburses me based on actuals. So, I don't have any expenses. How do I calculate my total taxable income? Will it be 100% of my contract value or 50%? My total income is under Rs. 20,00,000.
Asked 10 days ago in Income Tax from Mumbai, Maharashtra

Dear Sir,

 

Hope you are doing well !!

 

You can take the benefit of section 44ada.

(Assuming you are providing eligible services specified under 44ada).

 

The income of any professional under this section is considered to be 50% of the total gross receipts for the year, as they usually assumed that they do not incur many expenses. The professionals under this scheme are not required to maintain books of accounts.

 

The following are the professionals, who are eligible to opt for Presumptive Taxation Scheme under Section 44ADA:

  • Engineering
  • Legal
  • Architectural profession
  • Accountant
  • Medical
  • Technical consultant
  • Interior business
  • Other notified professionals such as authorized representatives, film artists, certain sports-related persons, company secretaries and information technology

Payal Chhajed
CA, Mumbai
2217 Answers
24 Consultations

5.0 on 5.0

If you don't have any expenses to claim then it will be 100% of your receipt.

50% is the minimum amount provided by government but if you are earning higher you need to show that.

If you need any assistance in filing your ITR you can contact me.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Naman Maloo
CA, Jaipur
1486 Answers
16 Consultations

5.0 on 5.0

Hello Sir,

 

You can claim presumptive taxation benefit under section 44ADA for you consultancy income of the year. In this way, you need to offer atleast 50% of your income to tax for the concerned financial year.

 

Thanks

Damini

Damini Agarwal
CA, Bangalore
329 Answers
19 Consultations

5.0 on 5.0

Hello Sir!! 

In your case apparently it appears that your Actual taxable income is your Contract Value as NIL expenditure to be accounted for. However, since you are working as a Professional then planning can be done and 50% or more than that income can be shown u/s 44ADA and benefit can be taken.

In case you have additional queries, please feel to contact. Thanks

 

Bhagyashree Kankaria
CA, Pune
35 Answers
8 Consultations

5.0 on 5.0

Hi,

 

- It will be 50% of the total contract value Rs.10 lacs i.e.50% of Rs.20 lacs.

 

Thanks

Vivek Kumar Arora
CA, Delhi
2520 Answers
112 Consultations

5.0 on 5.0

Hi

 

If your services are covered under Eligible services mentioned under sec 44ada,then you can take the benefit of PTS,by declaring minimum 50% as taxable Income and pay taxes accordingly.

 

And if its not covered then file return under normal tax payer and pay taxes on actual Income less expenses (if any).

 

 

Hope it helps

 

Swati Agrawal
CA, Mumbai
1044 Answers
4 Consultations

5.0 on 5.0

You can claim 50% under section 44ADA for your consultancy services.

Priyank Kumar
CA, Agra
62 Answers

5.0 on 5.0

Hello,

 

You can take the benefit of Sec. 44ADA. By covering yourself under this presumptive taxation scheme you can offer 50% of your total receipts as your income from the profession.

I hope this answer satisfies your requirement.

 

Regards,

CA Hunny Badlani

Badlani & Associates

Hunny Badlani
CA, Neemuch
254 Answers
1 Consultation

5.0 on 5.0

Hello Sir,

 

It will be 50% of contract value.

Karishma Chhajer
CA, Jodhpur
1074 Answers
4 Consultations

5.0 on 5.0

Dear Sir,

1. Following professional ( called as Specified professional)can declare income u/s 44ADA . (i.e 50% of gross receipt)

  • Legal
  • Medical
  • Engineering
  • Architectural
  • Interior decoration
  • Accountancy
  • Technical consultancy
  • Film artists(anyone engaged as a professional in the film industry)

2. Other ( Non specified) can opt 44AD on reasonable interpretation of law. (8% or 6% on amount received in account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account.). Reason behind the reasonable interpretation is, professionals cant opt 44AD on literal interpretation. But non specified professionals are not eligible for presumptive taxation except u/s 44AD0

 

"On safer side you can declare 50% of income u/s 44AD, if you are non specified professional. "

Shrinidhi Rao
CA, Udupi
30 Answers

Not rated

Hi

 

I assume your query us in relation to income tax.

 

Depending on the nature of services provided you, if eligible under section 44AA, you may claim the benefit of presumptive taxation scheme under section 44ADA whereby 50% of your gross receipts shall be considered as expenses without the requirement of maintenance of books of accounts.

Lakshita Bhandari
CA, Mumbai
3056 Answers
139 Consultations

5.0 on 5.0

You don't have to pay advance tax 4 times a year if you are covered under section 44ADA. You have to pay 100% of your advance tax liability upto 15 March.

Priyank Kumar
CA, Agra
62 Answers

5.0 on 5.0

No in 1 installment in March.

Naman Maloo
CA, Jaipur
1486 Answers
16 Consultations

5.0 on 5.0

Good Morning sir, 

You can pay on or before 15th March( 100% in last quarter only). First 3 installments are not applicable to 44ad beneficiary. 

Shrinidhi Rao
CA, Udupi
30 Answers

Not rated

Professionals are covered under 44ADA and not 44AD. 

Advance tax has to be deposited in March only.

Lakshita Bhandari
CA, Mumbai
3056 Answers
139 Consultations

5.0 on 5.0

Hi,

 

The taxpayers who have opted for presumptive taxation scheme have to pay the whole amount of their advance tax in one instalment on or before 15 March. They also have an option to pay all of their tax dues by 31 March.

Payal Chhajed
CA, Mumbai
2217 Answers
24 Consultations

5.0 on 5.0

 

There is a section 44ADA which can be applied if you are rendering technical consultancy services wherein 50% of your receipts will be treated as your taxable income.  You cannot claim any expenses on this.  Also, since foreign employer has not deducted any taxes, ensure you pay advance tax to avoid interest cost later.  You can submit 4 installments as per the various due dates given. 

 

Your roughly calculate your annual income and tax thereon.  THereafter pay the tax installments accordingly.  The income estimate can be made for every installments. I would advise you to make a little higher payments in first installments to avoid interest. 

Jasmina Jain Shah
CA, Greater Mumbai
280 Answers
3 Consultations

5.0 on 5.0

It is one installment on or before 15 March. You can pay till 31.03.XXXX

Vivek Kumar Arora
CA, Delhi
2520 Answers
112 Consultations

5.0 on 5.0

100% of advance tax in one installment.

Hunny Badlani
CA, Neemuch
254 Answers
1 Consultation

5.0 on 5.0

Ask a Chartered Accountant

Get tax answers from top-rated CAs in 1 hour. It's quick, easy, and anonymous!
  Ask a CA