Regarding section 44ad
Querist : Anonymous
a person carrying on profession as referred to in sec.44AA(1)
or
a person earning income in the nature of commission or brokerage,
or
a person carrying on any agency business
Professions referred in Sec. 44AA(1) are Legal, Medical, Engineering or Architectural profession or the profession of Accountancy or technical consultany or interior decoration or any other profession as may be notified by the Board in the official gazette
Querist : Anonymous
plz also tell me about eligible business u/s 44AD
Querist : Anonymous
plz also tell me about eligible business u/s 44AD
Eligible business means any business except the business covered u/s 44AE.
However, professionals and agency or commission business is NOT covered u/s 44AD.
Querist : Anonymous
CIT v. Lallubhai Nagardas & Sons [1993] 204 ITR 93 (Bom).
this is reference of case which is covered u/s 44AD. this is also covered in eligible business. plz advice.
my client is rendering repair services of machinery n i want to apply section 44AD n what about its code for nature of business
1. Applicability of Section 44AD
Section 44AD applies to resident individuals, HUFs, and partnership firms (not LLP) engaged in an eligible business.
It provides a presumptive taxation scheme where 8% (6% for digital transactions) of turnover is deemed income, and no detailed books need to be maintained.
2. Professions & Section 44AD
Section 44AD does NOT apply to professions mentioned under Section 44AA(1), i.e., professions like legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, etc.
Also, agency or commission-based businesses are excluded from Section 44AD (retrospectively from AY 2011-12).
3. Brokerage & Commission Income
Agency business or commission income is excluded from 44AD.
However, stock and share broking or dealing in shares/securities has been held as business income eligible under Section 44AD (refer: CIT v. Lallubhai Nagardas & Sons [1993] 204 ITR 93 (Bom)).
So, if your client is engaged in brokerage/sub-brokerage earning commission or brokerage income, Section 44AD does NOT apply.
4. Eligible Business under Section 44AD
Any business except:
Professionals covered under Section 44AA(1)
Agency or commission business
Business covered under Section 44AE (like transporters)
Businesses with income exceeding prescribed limits
Examples: trading, manufacturing, repair services, consultancy (non-professional), etc.
5. For Your Client Rendering Repair Services
Repair services are generally considered a business.
Hence, your client can opt for presumptive taxation under Section 44AD.
Regarding the nature of business code for registration or filing, use something like:
“Repair and Maintenance” or
SIC/NAICS code applicable to repair services (like "331" for machinery repair under some classifications).
Summary:
Business Type Section 44AD Applicability
Professional services (legal, medical, accountancy, etc.) No
Agency or commission income No
Stock & share broking Yes
Repair services Yes
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