Hi I am a BA in economics. I am setting up a proprietorship which will employ architects and interior designers. The proprietorship will be providing architectural drawing outsourcing services to other architects, interior design to end users / client, project management services on small construction projects and sale of furniture etc. Is my business under 44AD or will my proprietorship be classified as professional services. I am not educated professionally. Just a BA in economics.
Dear Sir,
Hope you are doing well !!
You can take the benefit of presumptive taxation scheme u/s 44ad.
No, the same will be not classified under professional services.
We have handled such cases before.
We may assist you in entire procedure.
It is advisable to take a phone consultation for detailed discussion.
Hi Sir
Yes your business is eligible under section 44 AD.
The presumptive taxation scheme of section 44AD is designed to give relief to small taxpayers engaged in any business (except the business of plying, hiring or leasing of goods carriages referred to in section 44AE).
The presumptive taxation scheme of section 44AD can be adopted by following persons :
1) Resident Individual
2) Resident Hindu Undivided Family
3) Resident Partnership Firm (not Limited Liability Partnership Firm)
In other words, the scheme cannot be adopted by a non-resident and by any person other than an individual, a HUF or a partnership firm (not Limited Liability Partnership Firm).
This scheme cannot be adopted by a person who has made any claim towards deductions under section 10A/10AA/10B/10BA or under sections 80HH to 80RRB in the relevant year.
Businesses not covered under the presumptive taxation scheme of section 44AD
The scheme of section 44AD is designed to give relief to small taxpayers engaged in any business, except the following businesses:
> Business of plying, hiring or leasing of goods carriages referred to in section 44AE.
> A person who is carrying on any agency business.
> A person who is earning income in the nature of commission or brokerage
Apart from above discussed businesses, a person carrying on profession as referred to in section 44AA(1)is not eligible for presumptive taxation scheme.
An insurance agent cannot adopt the presumptive taxation scheme of section 44AD
A person who is earning income in the nature of commission or brokerage cannot adopt the presumptive taxation scheme of section 44AD. Insurance agents earn income by way of commission and, hence, they cannot adopt the presumptive taxation scheme of section 44AD.
A person engaged in a profession as prescribed under section 44AA(1) cannot adopt the presumptive taxation scheme of section 44AD
A person who is engaged in any profession as prescribed under section 44AA(1) cannot adopt the presumptive taxation scheme of section 44AD.
A person whose total turnover or gross receipts for the year exceed Rs. 2,00,00,000 cannot adopt the presumptive taxation scheme of section 44AD
The presumptive taxation scheme of section 44AD can be opted by the eligible persons, if the total turnover or gross receipts from the business do not exceed Rs. 2,00,00,000. In other words, if the total turnover or gross receipt of the business exceeds Rs. 2,00,00,000 then the scheme of section 44AD cannot be adopted.
Thank you. Payal and Karsihma Are you both saying that I will not be deemed as engaged in a profession because I am not a qualified professional even though I am using my employee's professional qualification to provide architectural and interior design services?
If you are not an interior designer then receipts by you would be covered under 44AD and not 44ADA.
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Thank you.
- You can avail the benefit of Presumptive taxation scheme u/s 44AD subject to fulfillment of other conditions.
- Also check for applicability of GST.
Yes, your understanding is correct.
Your services would not be treated as eligible services u/s 44ada.
So,you can take the benefit of presumptive taxation scheme u/s 44ad.
It is advisable to take a phone consultation for detailed discussion.
Hi Sir
Yes your are not eligible for taxation under section 44 ADA.