• Presumptive Taxation scheme under Section 44AD

I'm a sole proprietor and doing full-time freelancing web development through upwork.com.
My total turnover is less than 50 lacks.

1. Am i eligible for the presumptive taxation scheme under section 44 AD and So can I take the benefit of declaring the profit as 8% of the turnover?
2. If so then under which business code?
Not sure if it covers under COMPUTER AND RELATED SERVICES-Other computation related services n.e.c.(14010).

Please give a detailed clarification.
Thanks.
Asked 5 months ago in Income Tax

Hi

 

Since you are a professional, you can opt for presumptive taxation under section 44ADA declaring 50% of gross receipts as profit.


You can opt for 16005 code.

Lakshita Bhandari
CA, Mumbai
5590 Answers
684 Consultations

5.0 on 5.0

- Web development services falls into the category of Information technology services which is a specified profession and you are eligible to take benefit u/s 44ADA and not 44AD. Under 44ADA, deemed profit is 50% of gross receipts. You are also liable to pay Advance Tax in one installment only (I.e. by 15th March of every financial year) otherwise you have to pay interest.

- You are also eligible for alternative tax regime.

- If turnover is more than Rs.20 lacs you are liable to obtain GST registration and file GST returns. Please  check whether it is a domestic supply of services or export of services.

Vivek Kumar Arora
CA, Delhi
4279 Answers
428 Consultations

5.0 on 5.0

You will be covered under 44ADA declaring 50% of your receipts as income.Code will be 14001.

Ruchi Goel Anchal
CA, Gurgaon
472 Answers
5 Consultations

5.0 on 5.0

You will.be eligible for 44ADA not 44AD

Vidya Jain
CA, Kolkata
958 Answers
49 Consultations

4.8 on 5.0

Hello,

 

No. You are not eligible for Sec. 44AD. You would be eligible for Sec. 44ADA presumptive taxation @50% of the gross receipts.

Further, if your gross turnover exceeds Rs. 20 Lakhs, you would be liable to take GST registration. If it qualifies as export of services, you can supply such services without payment of GST under LUT.

 

I hope this answer satisfies your requirements. 

 

Regards,

CA Hunny Badlani

Hunny Badlani
CA, Madhya Pradesh
2588 Answers
12 Consultations

5.0 on 5.0

Dear Sir,

 

Hope you are doing well !!

 

1. You are eligible for presumptive taxation scheme u/s 44ada.

 

Your income will be computed on presumptive basis, i.e. @ 50% of the total gross receipts of the your profession.

 

2.You can opt the 16005 code.

 

 

Payal Chhajed
CA, Mumbai
5136 Answers
194 Consultations

5.0 on 5.0

Hi

 

1. Yes you can go for section 44ADA of presumption taxation. 50% of gross receipts will be taxable deemed profit.

Section 44ADA offers a scheme of presumptive taxation of profits and gains arising from professions mentioned under Section 44AA(1) of the Income Tax Act, 1961. The benefit of section 44ADA can be taken only by those specified professionals whose annual gross receipts are under Rs 50 lakh

2.  Code will be 16005.

Karishma Chhajer
CA, Jodhpur
2439 Answers
27 Consultations

5.0 on 5.0

For FY 20-21, you are required to deposit advance tax by 15th March. When you are opting for presumptive taxation, there is only one installment of advance tax i.e. 15th March.

 

ITR has to be filed by 30th sep. Pay the taxes now to avoid further levy of interest.

Lakshita Bhandari
CA, Mumbai
5590 Answers
684 Consultations

5.0 on 5.0

- In case of presumptive taxation schemes i.e. 44AD and 44ADA, taxpayer has option to pay advance tax in one installment i.e. 15th March of every financial year. There is no extension in the date for payment of advance tax for the F.Y. 2020-21. If you are a senior citizen then self assessment tax paid u/s 140A will be treated as advance tax (applicable for F.Y. 2020-21).The due date has been extended from 31.07.2021 to 30.09.2021 for A.Y. 2021-22 but if net tax liability is more than Rs 1 lacs after deducting TDS then you are liable to pay interest for delay in filing of ITR for F.Y. 2020-21. In case of non-payment of advance tax, you will be liable to pay interest u/s 234B and 234C. Rate of interest is 1% per month. 

Vivek Kumar Arora
CA, Delhi
4279 Answers
428 Consultations

5.0 on 5.0

Advance Tax payments dates were not extended. It was 15th March 2021.

Ruchi Goel Anchal
CA, Gurgaon
472 Answers
5 Consultations

5.0 on 5.0

You might be considered as professional under 44ADA wherein you might have to show 50% of turnover as profit.

Do check that as well.

You can use code of other services. 21008.

For which year you wish to to pay tax because for FY 2020-21 last day was 15 March for advance tax after that interest will be charged.

 

You can read more here: https://www.taxontips.com/what-is-advance-tax-and-who-are-liable-to-pay-advance-tax/

 

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

Thank you

Naman Maloo
CA, Jaipur
3915 Answers
52 Consultations

5.0 on 5.0

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