06 October 2014
I am a tutor and make about 18 lakhs a year. all my income is made through providing freelance tutoring service on freelancer.com (Australian website) and I get the money to my bank account through PayPal.
now I run no business and all the money is received into my saving account about 1.5 lakhs per month.
do I have liability to pay income tax?
can I pay income tax as per 44ad?
is there anything else that I need to know.
would really help all the assistance (I am a total new bid and this is my first year of work)
06 October 2014
Yes you can file the income tax return u/s 44AD in which you will have to declare at least 8% of your gross receipts as your net income. Your gross receipts are 18 lakhs 8% of which comes to Rs. 144000/- which indicates that you will not have any tax liability unless you have other sources of income. The threshold limit is Rs. 200000/- and there is a tax rebate of Rs. 2000/- u/s 87A for income upto Rs. 500000/-.
11 October 2014
Dear Sonu and Abhishek. Income Tax Return can be filed u/s 44AD only by eligible assessee and only for eligible business.
As per section 44AD, Eligible business means : (i) any business except the business of plying, hiring or leasing goods carriages referred to in section 44AE; and
(ii) whose total turnover or gross receipts in the previous year does not exceed an amount of 44[one crore rupees].
Hence it is Clear that Profession is not covered here. Hence Income of professional can not be said to be filed under 44AD.
11 October 2014
Dear Sonu and Abhishek. Income Tax Return can be filed u/s 44AD only by eligible assessee and only for eligible business.
As per section 44AD, Eligible business means : (i) any business except the business of plying, hiring or leasing goods carriages referred to in section 44AE; and
(ii) whose total turnover or gross receipts in the previous year does not exceed an amount of 44[one crore rupees].
Hence it is Clear that Profession is not covered here. Hence Income of professional can not be said to be filed under 44AD.
In this case Mr. Sonu is not carrying on any notified profession u/s 44AA. He is a tutor and carrying on freelance work on a website. Neither such type of profession nor teaching profession has been mentioned in section 44AA or by the CBDT. Section 44AD mentions that eligible business any business except u/s 44AE and those which are covered under compulsory tax audit u/s44AB. All other businesses can file their return u/s 44AD.
As professional doesn't come under ambit of section 44AD, and Tutorship is a profession by nature, hence the same should not be covered under section 44AD.
The profession is not included in the business because:
• There is specific reference to the word Business in Section 44AD, which does not include profession
CAclubindia
