Taxation under Section 44AD for TDS

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This discussion clarifies how presumptive taxation under Section 44AD interacts with Tax Deducted at Source (TDS). Even when opting for the 44AD scheme, businesses remain obligated to deduct TDS if applicable. The query seeks guidance on applying the correct tax slabs (6% for banking, 8% for cash) to various income components including TDS, bad debts, and outstanding amounts, especially when payments are partially received through banking channels.

Elbin

Elbin (Querist)

12 March 2024 My company has opted U/s. 44AD & net turnover for the year is ₹10Lakhs in which payment rec'd via bank channel (Online & Cheque) is ₹6.5Lakhs + Cash - ₹1Lakh + TDS - ₹20K + Bad Debts - ₹13K & Outstanding is ₹2.17Lakhs.

Please guide in which tax slab (6% / 8%) I have to put TDS, Bad Debts & Outstanding amount.

RAJA P M

RAJA P M (Expert)

13 March 2024 6% For receipt through banking mode. 8% for cash receipts.

Elbin

Elbin (Querist)

13 March 2024 & what about part payment rec'd in bank & balance in TDS ?

RAJA P M

RAJA P M (Expert)

13 March 2024 That's also a digital mode receipt of amount and balance is TDS. It's not cash transactions.

Elbin

Elbin (Querist)

13 March 2024 @ RajaThanks for the clarification

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

16 August 2025 Please note that opting for the presumptive scheme under Section 44AD does not exempt one from TDS obligations. If you are required to deduct tax under any TDS provisions (such as salary, contractor payments, rent, etc.), you must continue to do so—even under the presumptive regime.

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