Can a Proprietorship firm doing Software Development business opt 44AD

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Sanket (Querist)
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22 November 2021 Can a Proprietorship firm doing Software Development business with 20+ employees file returns under section 44AD?
Turnover is less than 2 Cr.
Will it be considered a profession under 44ADA? or can it be considered 44AD as a business?
If 44AD, and if books of accounts are NOT maintained, then how will one answer in case of any query from department?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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22 November 2021 Whether the software is developed as per customer's requirement?

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Sanket

Sanket (Querist)
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22 November 2021 Yes sir, it is developed as asked by Customer

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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22 November 2021 It means the customers must be deducting TDS u/s. 194Jb?

Sanket

Sanket (Querist)
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22 November 2021 Yes sir, TDS is deducted under 194Jb

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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22 November 2021 So no question of Sec. 44AD; and as per turnover you have crossed 50 lakhs, so sec. 44ADA is also out question.
File ITR 3 under regular assessment.

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Sanket

Sanket (Querist)
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30 December 2021 Noted sir, But for this same case, what would be the limit for Tax audit? Propritorship, Software Development, All transactions are digital.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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30 December 2021 For professional income the tax audit limit is Rs. 50 lakhs.

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