Ues u can use presumptive taxation. You need to use form 4. If you want I can help you in filling the return
Which ITR form should I file?
Hi - I am a consultant working for multiple clients as a writer [ blog post, website content, etc] Most of the clients are in India and pay me in INR, but one of my clients is in Singapore and remit me based on my working hours. Apart from that, I have my FD's and savings bank account. My total income is less than 5 lakhs. Which ITR form should I use to file my tax return? Also what is this Presumptive taxation? Can I use it? How to use it?
Asked 5 years ago in Income Tax
Hi,
- Use ITR-4 and avail benefit of presumptive taxation. Under presumptive taxation, you need to pay tax on 6%/8% of the gross receipts. Rate of 6%/8% is minimum total income. 6% is applicable for all digital transactions and 8% for cash transactions.
Thanks
Hello,
You would be required to file ITR-4, declaring your professional income under Business/Profession Head and Interest Income on FDR and Savings Bank A/c. under Other Sources Head.
Yes, you can use the presumptive taxation scheme u/s. 44ADA. since you work as a writer, your services to your client in India & abroad would be covered under Literary activities under Sec. 44ADA. Under this scheme, your income would be deemed to be 50% of your gross total receipts from the consulting work.
I hope this answer is clear in its sense and satisfies your requirement.
Regards,
CA Hunny Badlani
Dear Sir,
Hope you are doing well !!
You need to file ITR 4 for presumptive taxation scheme.
Presumptive taxation scheme can be used by businesses having a total turnover of less than Rs 2 crore (44AD) and eligible professionals with gross receipts of less than Rs 50 lakh in a financial year (44ADA).
Presumptive taxation scheme (PTS) allows you to calculate your tax on an estimated income or profit.
The scheme can be used by businesses having a total turnover of less than Rs 2 crore and eligible professionals with gross receipts of less than Rs 50 lakh in a financial year. Those who adopt PTS to file their returns are not required to maintain books of accounts.
Under PTS, the eligible businesses can estimate their net income at the rate of 6% of the total turnover, if gross receipts are received through digital mode of payments or at the rate of 8% in case of cash receipts. However, the assessee is allowed to willingly declare income at a higher rate than the minimum of 6-8% of the total turnover.
Professionals who are governed or regulated by an institute or body such as doctors, lawyers, architects, interior designers and others can adopt PTS. For them, 50% of the total receipts during the fiscal will be considered as profit and get taxed accordingly. A professional can voluntarily declare the income at a higher rate than mandatory 50% of the total receipts.
Hi,
You'll have to file ITR-4.
You need to add interest on your FD and savings bank account in Income from Other sources. (Form 26as displays your TDS deducted on the interest amount)
If your professional income is less than 50 lakhs during the financial year, then you are eligible for presumptive taxation u/s 44ADA.
In your case, your services are listed as eligible services as per sec 44ADA hence you can claim the benefit of presumptive taxation.
If your income is say 4 lakhs during the financial year, 50 % of the total income i.e., 2lakhs will be declared as your income if you opt presumptive taxation.
If you need more assistance, i can help you with your ITR filing.
Thank you
Hi
In my opinion you will not be able to claim the benefits of presumptive taxation. Yours is clearly a profession and eligible professions for claiming presumptive taxation under section 44ADA are
- Legal
- Medical
- Engineering
- Architectural
- Accountancy
- Technical Consultancy
- Interior Decoration
So you should file your professional income in ITR 3 claiming all relevant expenses of your business.
We may help you with return filing.
Yes you can use presumptive taxation for your consultant income as it is your business income. Using presumptive taxation you dont need to maintain books of accounts and show your actual profit or 8% of total receipt whichever is higher as your profit.
Your FD and saving interest will be shown as income from other sources.
You need to file ITR 4.
If you need any assistance feel free to 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.
Hello Sir,
In your case, ITR 4 is applicable.
You can definitely use presumptive taxation scheme u/s 44ad.
We’ll quickly list down the features of this scheme-
a. Your turnover must be less than Rs 2 crores.
b. Your NET income shall be considered as 8% of your turnover (net income will be considered 6% in case of digital receipts).
c. You don’t have to maintain accounting records.
d. You don’t have to pay advance tax (from FY 16-17, assessee opting for presumptive taxation has to pay 100% advance tax by 15th March of that particular financial year).
e. You don’t have to get your accounting records audited.
f. You can file your tax return in ITR-4 a much shorter and simpler form than ITR-3.
Hi
You should use Itr-4,can file return using Presumptive taxation scheme under sec 44ada. You need to declare minimum 50% of your receipts as taxable income. and pay taxes (if any) according to slab.
Saving bank account interest and FD interest will be declared under income from other sources .
Hope it helps
Presumptive taxation is applicable to the Professionals whose total gross receipts does not exceed Rs 50 lakhs in a financial year. The income of the professionals opting for this scheme would be assumed at 50% of the total Gross receipts for the year. You can use this scheme. You have to report 50% of your total receipts as taxable income.
Since your income is belpw 5 lacs, you do not have any tax liability. You should use ITR 4 for filing your return.
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