Im a freelancer estimated to earn around 50 Lakhs this FY.

- You have not mentioned the nature of services to be provided by you. Only specified professionals are covered u/s 44ADA. Assuming you are eligible u/s 44ADA.

1. It says 50% of gross receipts or actual profit whichever is higher. If you will make profit of 80-90% then you will be liable to pay tax on such profit. There is no such concept of volunteer disclosure. If you do not want to go for audit, opt for presumptive scheme.

2. Advance tax is computed on the estimated basis and paid in four installments. At every installment, recalculation of income is done for correct payment of advance tax. If it is short-paid due to actual income more than the estimated income then the interest amount will be minimum and excess paid will be refunded.

3.In your case, applicability of law is on the basis of nature of services provided by you. You can not change the sole character by hiring employees. It is a wrong misconception.

4. Considering your income, it is better to opt for normal option.

5. GST will also be applicable to you as the limit for registration is Rs.20 lacs.

6. Applicability of TDS may also take effect.

7. You can claim deductions u/s 80.

8. If it is an export of services then FEMA may also apply.

It needs proper tax planning, please take phone consultation for detailed discussion

Hi

1. Yes, you may opt for presumptive taxation under section 44ADA provided you have an eligible profession under section 44AA. Thereby, you may declare 50% as income; no other deductions.

2. Interest shall be applicable.

3. In my opinion, no. Since you are and will be conducting a profession, 44AD can't apply to you.

4. All the expenses incurred for earning the professional income shall be eligible as deduction.

Dear Sir,

Hope you are doing well !!

You can take the benefit of presumptive taxation scheme u/s 44ADA.

Below are the professionals who can avail the benefits of presumptive taxation under this section:

• Engineering

• Legal

• Architectural profession

• Accountant

• Medical

• Technical consultant

• Interior business

In case, if you are providing eligible services as mentioned above and adopting the provisions of section 44ADA, income will be computed on a presumptive basis, i.e. @ 50% of the total gross receipts of the profession.

You will be required to pay taxes on the same as per applicable slab rate.

Moreover, you could still avail deductions under section 80C-U, so this might further reduce your taxable income.

It is advisable to take a phone consultation for detailed discussion. 

Hello,

1. Whether eligible for presumptive taxation would depend upon the nature of freelancing services provided by you. Assuming you are eligible for Sec. 44ADA presumptive taxation, your actual profit, or 50% of the gross receipts, a higher amount would be taxable u/s. 44ADA. A better tax planning strategy could be provided as per the nature of freelancing services.

2. Advance tax is paid in four installments on an estimated basis. If lessor advance tax is deposited, interest is charged on the deficient amount, and in case a higher amount is deposited as advance tax, the extra amount is refunded after the filing of the income tax return.

3. Sec. 44AD 8% presumptive taxation would depend upon the nature of your freelancing services.

4. Yes, business expenses would be allowed and since registered as an individual, the specified benefits would be available. Personal expenses are not allowed.

Furthermore, since the total receipts exceed the threshold limit for GST, GST registration and compliances would be mandatory.

I hope this answer satisfies your requirements. It would be advisable to take a phone consultation.

Regards,

CA Hunny Badlani

Firstly you need to check whether you fall under 44ADA or not where professional are covered.

If yes you need to show 50% profit or actual profit whichever is higher.

Although right now no questions are being raised but in long run I won't suggest it.

How are you liable for advance tax?

If you are going for presumptive you need to pay 100% advance tax in march.

If you don't pay advance tax you have to just pay interest @1% per month.

It all depends on type of income.

I think you have not been guided properly for 44AD and 44ADA.

We can have a phone consultation to discuss in a better manner.

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

Thank you

1.Please share of service you are providing.

2 In case of your services covered under section.

Taxable amount will be higher of 50%of gross receipts or actual profit.

3. If you  pay short amount of tax then interest will be charged or excess amount will be refunded.

4. 8% profit margin under presumptive taxation depends on nature of service.

5. It is better to opt normal.

6. Consider provision related to TDS,GST. 

In my opinion, this professional won't be eligible under presumptive taxation scheme. You will have to file return with all your your actual expenses and pay taxes accordingly.

Hi

 No, This services is not covered under section.

You won't be covered under 44ADA but under 44AD and use this section and file presumptive return.

I can assist you let's have a phone consultation.

- Yes it is covered under presumptive taxation u/s 44AD and not 44ADA.

Your professional services are not covered under the Sec. 44ADA Presumptive Taxation Scheme.

Since you have Foreign clients, if you receive your payment in foreign convertible currency, your services would be classified as Export Services, and no GST would be payable on the supply of such services under LUT. You would be required to take GST registration and make necessary compliances once you cross the threshold limit of Rs. 20 Lakhs.

No, your profession is not eligible for presumptive taxation.