Does Digital Marketing come under technical consultancy-Section 44ADA

Hello,

Going by the facts of your case and the understanding of the nature of services being provided, it seems you would be covered under section 44ADA. 

Best Regards, 

44AD is more appropriate.

Hi

Your profession is not covered under the list provided in section 44AA, hence you won't be eligible for presumptive taxation scheme under section 44ADA.

44ADA is available only to persons carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration .

- 44ADA includes technical consultancy but to cover digital marketing services under technical consultancy may be subject to litigation. Technical services involves more human element than machines. Further, 44ADA has maximum limit of 50 lacs gross receipts whereas 44AD has a limit of 2Cr.

Hello, 

First, you need to understand this more from department's perspective as well. If you opt for 44ADA, it works in department's favour as the income is assumed to be 50% of receipts whereas in 44AD its 8% of gross sales.

Second, whether digital marketing is covered under the term technical consultancy or not can be subject to different interpretations per different professionals or individuals. 

Third, there are several case laws where department has disputed assessee's choice between these two sections specially in such borderline case. 

Having said that, I would suggest you to avoid getting into presumptive taxation scheme altogether and go for filing on the basis of actual income generated and computed on the basis of books maintained.

Best Regards, 

Hi

In accordance to section 9 of the Income Tax Act, 1961 ("the Act"), Fees for Technical Services (FTS) is defined as any consideration for the rendering of any managerial, technical or consultancy services" including the provision of services of technical or other personnel. Dictionary meaning of the same comes to: Managerial: Services relating to a manager or to the functions, responsibilities, or position of management. Technical: Services relating to, or involving the practical, mechanical, or industrial arts or the applied sciences. Consultancy: the act of offering expert or professional advice in a field.

Services provided by you is covered under above definition is  subject to litigation.

Please have a phone call for better understanding.

Digital marketing is not covered under 44ADA you can show it as business income under 44AD.

If you need any assistance we can have a phone consultation.

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Thank you