Software business - 44ad or 44ada

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 September 2018 Hi, I'm an individual software developer working for overseas clients. My annual receipts this financial year(2018-19) may be around 60 lakhs, but definitely above 50 lakhs. Thus I can't use 44ADA, which I have been using since last 2 years. My expenses related to profession are not more than 3-4 lakhs a year.

My question is, can I incorporate a small company, and use 44AD. The business is software development and I work independently(not under any company). I can hire an employee and deduct TDS if need be to strengthen the case for 44AD.

Is this possible? Can software work come under business rather than a profession.

Thanks.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 September 2018 Company can't claim 44AD.

Querist : Anonymous

Querist : Anonymous (Querist)

17 September 2018 Thank you Ca R Seetharaman. I'm not inclined towards incorporating a company. Can I use 44AD in any way? What are the requirements to be considered a business for tax purpose(as opposed to professional)?