• Provide Digital Marketing Services to my clients in US, Should I opt for 44AD or 44ADA?

Hi, I am a digital marketing expert. I provide services like managing Google Ads, Facebook Ads, and Social Media Marketing for my clients. 
For one of the clients, I was hired as an independent contractor (via a third-party Freelance website) For others there is no contract. 
I send the invoice via PayPal and get money into my bank account. 

Can i claim 44ad for the same??
I am asking bcz in 44AA(1) it is clearly mentioned that 'IT services' is covered under specified profession.
And in 44ad it is clearly mentioned that person falling in the list of specified profession can't opt for 44ad.
Please clarify!
Asked 1 month ago in Income Tax

Since it is professional services, you can claim 44ADA not 44AD

 

Vidya Jain
CA, Kolkata
1008 Answers
58 Consultations

4.8 on 5.0

Hello,

 

As a digital marketing expert offering services like managing Google Ads, Facebook Ads, and Social Media Marketing, you fall under the 'professional services' category, which is covered under Section 44AA of the Income Tax Act of India. Therefore, you should opt for Section 44ADA for presumptive taxation, not Section 44AD. Section 44ADA applies to professionals and allows for 50% of your total gross receipts or turnover to be considered as your income for taxation, provided your total turnover/gross receipts do not exceed ₹50 Lakhs.

 

Hope you find the information helpful. You are free to contact me for further discussion.If you could spare two minutes of your time to write a review, It would be really grateful and very happy to read it.

Thank you.

Shubham Goyal

Shubham Goyal
CA, Delhi
177 Answers
2 Consultations

5.0 on 5.0

You are eligible to opt for presumptive taxation scheme u/s 44AD subject to fulfillment of the conditions of the section 44AD. 44ADA is applicable to specified professions. IT services includes software development, software consultancy or any other IT services which needs special knowledge 

Also check GST liability. If turnover exceeds Rs. 20 lacs in a financial year then it is mandatory to obtain GST registration

 

For detailed discussion you may opt for phone consultation

Vivek Kumar Arora
CA, Delhi
4810 Answers
1013 Consultations

5.0 on 5.0

Can you please clarify how is your service under IT service and where in 44AA(1) there is IT services covered?

I think there is just engineering service.

I think you would be eligible for 44AD.

 

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
4256 Answers
96 Consultations

5.0 on 5.0

IT services are not defined. Profession implies professed attainments in special knowledge as distinguished from mere skill; special knowledge which is to be acquired only after patient study and application 

Vivek Kumar Arora
CA, Delhi
4810 Answers
1013 Consultations

5.0 on 5.0

For determining whether to opt for Section 44AD or 44ADA under the Indian Income Tax Act, consider the following:

  1. Since 'IT Services' is not explicitly defined in the Act, and digital marketing could potentially fall under this category, it's ambiguous whether your services align with the specific nature of 'IT Services' listed under Section 44AA.

  2. Given your GST registration and fulfillment of other conditions for Section 44AD, you might lean towards this option. However, the professional nature of your services might be more aligned with Section 44ADA.

Hope you find the information helpful. You are free to contact me for further discussion.If you could spare two minutes of your time to write a review, It would be really grateful and very happy to read it.

Thank you.

Shubham Goyal

Shubham Goyal
CA, Delhi
177 Answers
2 Consultations

5.0 on 5.0

Dear sir,

 

In my opinion this is not IT services and for providing such professional service the person providing it should have a professional degree in same in my understanding.

 

Regards.

Naman Maloo
CA, Jaipur
4256 Answers
96 Consultations

5.0 on 5.0

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