01 December 2021
dear sir - An individual runs a hospital by employing 1 or 2 qualified doctors -himself is not a qualified person and he being the proprietor tries to file his returns adopting 44ADA ( gross receipts do not cross 50 lakhs ) - will it be OK ? Is it not a condition that the assessee should be a qualified professional in order to claim 44ADA?
01 December 2021
The same question is discussed so many times on the platform by our experts. Though not final but result is:: it cannot be assessed under sec. 44ADA, as only specified professionals can opt for presumptive assessment u/s. 44ADA.
01 December 2021
Theoretically, it is one part; but practically it has been accepted by department, without any hitch. That is the reason most of such cases are being filed under sec. 44ADA by practitioners. We have many such clients (hospitals/ nursing homes/ laboratories) who prefer to file their ITR under sec. 44ADA, because of least compliance.
01 December 2021
Recently, we were chatting with one of the officers, after our official submissions. He asked the same question after reading the discussion on this platform. Wanted to know our opinion. I asked counter question: 1. Why TDS being deducted u/s. 194J over these people, if they are not eligible for sec. 44ADA? 2. Why the section is applicable over 'person engaged in profession......' and not over 'specified professionals engaged in these professions...."? ( though the word 'person' is replaced with 'individual & partnership firm' to remove HUF, from this finance act)? 3. By removing just HUF from the act, and not rectifying it with 'specified professions as per sec. 44AA(1)' department is acceptable with others?
01 December 2021
Thank you again for deliberating on the subject of 44ADA - I too was about to send a query almost on the same lines as follows : An individual who is an undergraduate is assisting different business houses in book keeping - accounting - and is earning around Rs 18 lakhs a year. According to me he can claim it as business receipts and declare 8% u/s 44AD. But on reading the section 44ADA it gives an idea about treating this as Profession of Accountancy ie one of the different specified professions. If that be the case the above assessee may have to adopt 44ADA and declare 50% as income.
02 December 2021
There are numerous such queries which can be summarized as: Any person engaged in such specific professions (as listed in sec. 44AA(1) of IT act), who are not technically qualified themselves, but run such BUSINESS, by hiring qualified professionals; be it IT industry or healthcare or accountancy etc... when they go for filling return... face the first question.... Nature of Business .... (and not whether you are qualified to do the business)!!!.... As soon as they select the code of the business,, they are entrusted with compliance of sec. 44ADA. The ITR is not accepted without minimum 50% profit margin or tax audit report u/s. 44AB(d). If somehow succeeded in filing otherwise, they have got defective notices. Though ICAI has already raised the issue, but no clarification from CBDT as on date.
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