Presumptive Taxation & Export of digital goods

- If you are selling software then income from such sale would be covered u/s 44ADA. If you are getting subscription in the form of licence fees then it is a royalty income and can be covered u/s 44AD.

- You have not mentioned nature of digital services in the question.

- Yes you can avail both 44AD and 44ADA simultaneously based on the facts.

Please take phone consultation for detailed discussion.

Hi

Yes and No. It all depends on how you register or run your unregistered business and profession. There are no express provisions in the Income tax act to allow or restrict application of both provisions of the act to an assessee simultaneously and hence, you can interpret the law to your advantage.

Let's approach the case under different scenarios. It is assumed that the business is an eligible business under 44AD and the profession is referred to in 44AA.

1. The business and profession (activities) are registered separately - You can very well apply both sections and disclose income from business under 44AD and income from profession under 44ADA. Eg: An architect who has registered his business of sale of cement and his profession of designing landscapes under two separate registrations - Both.
2. The business and profession are registered as one entity - The primary activity as per the registration may be considered as the deciding factor. If both business and profession are primary activity, then the activity that yields the highest income (predominant) is considered as primary activity. If the primary activity is Business, then 44AD can be applied. Otherwise, 44ADA is applied for both incomes as a whole. A 50%–50% case is left for discretion of the assessee but declaring income under 44AD would be a better choice. Eg: The same architect gets single registration for both business of selling cement and the profession of designing landscape and predominantly sells cement - 44AD.
3. If one activity is registered and the assessee predominantly carries out the registered activity - The activity for which the registration is applied can be taken as primary activity and 44AD or 44ADA can be applied accordingly. Eg: The architect has registered his profession but also sells cement on the side - 44ADA.
4. One of the activities is registered but the assessee predominantly carries out the other activity - The activity that is carried out predominantly can be considered as primary activity and 44AD or 44ADA can be applied accordingly. Eg: The architect has registered his profession but predominantly sells cement - 44AD.
5. The business and profession are both unregistered but are run independently and have no connection with each other - You can apply both sections and disclose income from business under 44AD and income from profession under 44ADA. Eg: The same architect has a business of selling vegetables and also designs landscapes by profession - Both.
6. The business and profession are unregistered, related to one another, may or may not be run independently - It is safe to assess which activity is predominantly carried out and declare income under 44AD or 44ADA on the whole income accordingly. Eg: the architect sells cement and predominantly designs landscapes without taking any registration - 44ADA.

Hi

It require detailed discussion please have a phone consultation for better understanding

please take phone consultation

Hi,

Selection of 44AD or 44ADA is a very debatable issue as there are very less judicial precedents available on this matter.

They way the provisions are worded, its not quite clear and there is always a grey area in cases like yours.

Thus, if the turnover is going to be significant, I would advice you to refrain from presumptive taxation and pay tax under normal scenario. Otherwise, it will create a huge wealth mismatch in future which can come under scrutiny.

Dear Sir,

Hope you are doing well !!

Since nowhere it is specified that a person who is opting to pay tax under 44ADA should not opt for sec 44AD. 

So, you can take the benefit of both sections simultaneously subject to certain conditions..

We may assist you in entire procedure.

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

I would recommend you to book consultation with expert at: https://www.taxontips.com/tax-notice-personal-consultation/

As it would be easy to discuss the details over phone call.

Yes you can use presumptive taxation for digital goods if you are doing business as sole proprietorship.