• Taxation for Personal Trainer under Income Tax Act

Hi,

I am writing this on behalf of a sole proprietor providing Health & Fitness Personal Training services (offline in a Gym and online via their own website).

There are certain professions which are not specified u/s 44AA(1) such as sport coaches etc.

Particularly, in case of sport coaches (similar coaching services as a Personal Trainer), as per NOTIFICATION NO 88/2008, TDS shall be deducted u/s 194J, as activities of coaches would fall under professional services for the purpose of 194J. However, the same is not covered u/s 44AA(1).

My queries are as follows:

1. Since we can not opt for 44ADA for such Non Specified professions, can we opt under section 44AD and offer income @ 8% or higher as the case may be.

2. If the personal trainer has received some fees from a Corporate Client (for providing fitness training services to its employees) after deducting TDS u/s 194J, and if we are not filling ITR considering 44ADA - then will CPC issue notice for proposed adjustment on the basis of TDS section?

Kindly advise.
Asked 1 month ago in Income Tax

1. Yes you can opt u/s 44AD and offer income @8%/6% as per the mode of payment.

2. No

Vivek Kumar Arora
CA, Delhi
4337 Answers
461 Consultations

5.0 on 5.0

Hi,

 

1. You cannot use section 44AD as it is only for business and not for profession.

 

2. No, just because you are not filing return using 44ADA cannot be a reason for notice. 

Lakshita Bhandari
CA, Mumbai
5616 Answers
728 Consultations

5.0 on 5.0

Section 44AD is applicable in your case. It is not necessary that business should always consist of trade, manufacture or commerce. Even activities of rendering services to others falls within the four corners of the expression business irrespective of deduction of TDS u/s 194J. Professon implies professed attainments in special knowledge as distinguished from mere skill. 

 

The income tax forms includes all types of business and professions under nature of business while opting section 44AD which initself is clear about the applicability of section 44AD in your case. 

 

For detailed discussion, you may opt for phone consultation.

Vivek Kumar Arora
CA, Delhi
4337 Answers
461 Consultations

5.0 on 5.0

Anything which is not falling under 44ADA and which is not excluded from 44AD i.e. commission business, vehicle hiring business can fall under 44AD and hence your business could fall under 44AD.

Deduction of TDS under section 194J does not mean that tax needs to be paid under section 44ADA.

 

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

Thank you.

Naman Maloo
CA, Jaipur
3949 Answers
58 Consultations

5.0 on 5.0

Hi,

 

See one need to understand the basic difference between a business and a profession. Business is more like trading , manufacturing etc. where profession is more about using his own skill and wisdom to generate revenue. They key thing in a profession is that profession is nothing without the active involvement of the professional whereas the business can run without active involvement of businessman. management can run the business.

 

I dont think you can call it a business.

Lakshita Bhandari
CA, Mumbai
5616 Answers
728 Consultations

5.0 on 5.0

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