44AD provision for presumtive tax for sole proprietor

Save Share

This query is : Resolved

Quick Summary

This discussion explores how a sole proprietor running a design firm offering IT services can benefit from the presumptive taxation scheme under Section 44AD. It clarifies how this scheme applies to businesses with employees and how profit is calculated in the service industry. The aim is to help sole proprietors understand their tax liability and optimise tax savings by filing the appropriate Income Tax Return (ITR).

Vijay

Vijay (Querist)

28 April 2023 I have a Design firm providing IT services (UX Design and development) services to various brands. It's a sole proprietorship. I personally work for customers and I have a small team who also work onsite for the customers and are billed hourly rate. How can I avail 44AD tax benefits. Also kindly explain what it would mean as an individual. Does it mean my total tax liability is 6-8% for total earninga or do I also have to separately file my individual taxes as per the tax slabs. In service industry how is profit calculated? How can I optimize my tax savings?