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Sec 44AD

kritarth (Auditor) (58 Points)

04 January 2017

can a service provider pay tax as per sec 44AD presumptive basis of tax.8%

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10 Replies

prem (Student CA Final ) (61 Points)
Replied 04 January 2017

which type of services??

1 Like

kritarth (Auditor) (58 Points)
Replied 04 January 2017

like repairing, maintenance of Boiler

1 Like

prem (Student CA Final ) (61 Points)
Replied 04 January 2017

yes u can pay

1 Like

kritarth (Auditor) (58 Points)
Replied 04 January 2017

Thanks for reply

SHS (SHS Tax & Accounting) (32 Points)
Replied 04 January 2017

A person engaged in a profession as prescribed u/s 44 AA (1) cannot adopt presumptive taxation scheme of sec 44 AD.

A person engaged in earning income in the nature of commission or brokerage cannot adopt the presumptive taxation scheme of sec 44 AD.

So that implies, apart from the above mentioned others can.

Section 44 AA (1)

Every person carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or any other profession as is notified by the Board in the Official Gazette' shall keep and maintain such books of account and other documents as may enable the 1 Assessing] Officer to compute his total income in accordance with the provisions of this Act.

Hope it helps

Sources :

https://indiankanoon.org/doc/1634513/

https://www.incometaxindia.gov.in/tutorials/13.%20tax%20on%20presumptive%20basis%20in%20case%20of%20certain%20eligible%20businesses.pdf

2 Like

MAULIK GANDHI (Tax Assistant) (221 Points)
Replied 04 January 2017

In my opinion you can't

Reason:-

1. Section 44AD is applicable to business like buying goods & selling it out. So therefore in such business margin are less so that they can take advatage of presumptive 8% income but in your case you are providing services since therefore it is not applicable in your case

2. Section 44ADA is applicable to professional's @ 50%

1) Legal

2) Medical

3) Engineering or architectural

4) Accountancy

5) Technical consultancy

6) Interior decoration

7) Any other profession as notified by CBDT

So therefore this section 44ADA is not appliable since you are in providing service of repairing, maintenance of Boiler

So in my opinion you are require to maintain books as metioned in section section 44AA of the Act. and your are taxable as per slab rate.

1 Like

Sourabh Jolly (Oil & Gas Industry) (111 Points)
Replied 04 January 2017

Yes, Service provider is also paid tax on presumptive income basis subject to some conditions.

MAULIK GANDHI (Tax Assistant) (221 Points)
Replied 04 January 2017

Originally posted by : Sourabh Jolly
	Yes, Service provider is also paid tax on presumptive income basis subject to some conditions.

Can you pls explain in details, I m glad to hear something new

MAHENDRA KUMAR (student) (34 Points)
Replied 04 January 2017

is thare sec 44ad say show profit 8 % if I can show my sales profit 10% ...

Pooja Thapliyal (17 Points)
Replied 23 May 2017

Section 44AD is for business. Section 44ADA serves for professionals providing services. In it, profits are assumed to be 50% and it is applicable in cases where turnover is less than Rs.50 lakhs.