• How much profit to be declared for ITR section 44ADA for professional

Hello sir,
myself dr abhishek andhare radiologist consultant doctor by profession. i worked with a diagnostic center on contract basis and does not have my own clinic setup and i am paid more or less fixed renumeration monthly. 

below are my yearly income and expenses in brief



total renumeration received 26,56,600 ////(  money deposited in axis bank)
total money in saving account of axis bank at year end 9,70,000/// after spending
total investments from axis acconnt 5,70,000. fd ,ppf, equity , mf
state bank of india saving balance 2,53,208 ( money transefred from axis account only).
 
total profit or saving for financial year from income  17,93,200///
 
 
 
 house rent paid for whole year---3,10,000///
from current years income ------1,30,000////
from previous years saving on tax was paid –1,80,000///
 
expenses from previous years saving account union bank ( mostly cash withdral and debit card shopping) 4,20,000//// for which tax is already paid.
 
 
most of the expenses are personal like online shopping , restarants payment, cash withdwals .
professional expenses  like travelling by cab, conforences , mobile bill are less. neighter i have any staff to pay.
 
my ca had adviced to file itr returns   under section section 44ada presumtive scheme of taxation for professionals but he is saying declaring profit 50 % of total renumeration can be problematic and may lead to scrutiny by income tax officer as expenses are less.

 
so i just wanted to ask how much should be profit declared for filing income tax returns under section section 44ada presumtive scheme of taxation for professionals.

is 18 lakh is safe in order to save tax as well as to avoid penalty or still lower income can be shown.

70 % of total renumeration is coming around 18 lak 60 thousands.

also i wanted to know what can be possible penalies?????

if you can opine on this i will be relieved.

thanking you
Asked 6 years ago in Income Tax

You can file your return under section 44ADA. There's no problem.

Under this section you can declare your profit to be 50% of your total receipts. You don't need to show any expenses. Declaring 50% profit won't attract any scrutiny or penalty.

Lakshita Bhandari
CA, Mumbai
5687 Answers
908 Consultations

5.0 on 5.0

Dear Abhishek,

Yes, technically your CA is right. You can show 50% profit under 44ADA.

But I would recommend you to show profit close to your actual profit as you mentioned (I.e.70%). Because over a period of time you would accumulate lot of wealth which will be inconsistent with your return and it can be difficult to prove.

However, an aggressive person can take a stand of 50% profit and in future he can fight it out with the department.

Please feel free to call revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.Com

Abhishek Dugar
CA, Mumbai
3576 Answers
183 Consultations

4.8 on 5.0

Hi

If you are getting your remuneration as salary income from diagnostic centre then you have to show as salary income. If you are getting as consultant then 50% the income to be shown as salary

Vidya Jain
CA, Kolkata
1008 Answers
58 Consultations

4.8 on 5.0

Hello,

You can show 50% of your income as your business expense and pay tax on the balance. But in your case I would suggest you pay tax on 60% of your income and claim 40% as your expenses on a safer side.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, ACA, LLB-GEN, CERT. FAFP

Rohit R Sharma
CA, Mumbai
2104 Answers
95 Consultations

5.0 on 5.0

Hi,

You will have to declare a minimum of 50% profit, unless you would like to declare a higher rate of profit.

Regards,

Keerthiga Padmanabhan

M.Com, CA, LL.B

Keerthiga Padmanabhan
CA, Greater Mumbai
784 Answers
27 Consultations

5.0 on 5.0

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