Sec.44ad w.r.t. educational institutions

This query is : Resolved

PLV SUBRAHMANYAM (Querist)
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17 November 2011 Sir

A Partnership Firm running an Educational Institute shall have to opt for Sec.44AD,
if it is having taxable income and does not
want to get the accounts Audited;

If so, whether Educational Activity comes under Business or Profession; Then, the firm
has to pay tax on 8% Net Profit. pl. clarify.

ramanandam babu
gudivada

Yash Anandkumar Mandavia

Yash Anandkumar Mandavia (Expert)
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17 November 2011 Sec. 44AD is for only Business. Education institute comes under the perview of profession.

Message likes : 1 times

PLV SUBRAHMANYAM

PLV SUBRAHMANYAM (Querist)
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17 November 2011 If an educational institution is run by professionally qualified teachers, we can say it as Profession; If it is run by a person hiring some Professional teachers and run on commercial lines, it will be treated as business; hence, Sec.44AD may applicable in such situation is to be clarified.

PLV SUBRAHMANYAM

PLV SUBRAHMANYAM (Querist)
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17 November 2011 This query is open; pl clarify;

ramanandam babu

gudivada

Vishal D Shah

Vishal D Shah (Expert)
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19 November 2011 I agree with PLV.

Yash Anandkumar Mandavia

Yash Anandkumar Mandavia (Expert)
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19 November 2011 I would like to ask you one thing over here. Whether the person who is hiring teachers is just an agent or he only runs the educational institution?

PLV SUBRAHMANYAM

PLV SUBRAHMANYAM (Querist)
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19 November 2011 Dear Yash Anandkumar

The person in question only runs the educational institution, but he is not qualified and hires various teachers
to teach the students

pl reply

ramanandam babu
gudivada

Yash Anandkumar Mandavia

Yash Anandkumar Mandavia (Expert)
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19 November 2011 He runs the educational institution. I assume that he is proprietor. Eventhough he is only hiring the qualified professionals, it would classified as profession only because the substance is that of providing education.

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