44ada

https://www.caclubindia.com/articles/a-guide-on-section-44ada-for-professionals--29186.asp

 

presumptive-tax-scheme-for-professionals-44ada

Who is the eligible assessee?
Resident assessee who is

• Individual (or)

• Hindu undivided family (or)

• Partnership firm (other than limited liability partnership)


Who are the beneficiaries?
Certain professionals referred to in section 44AA(1) of the Income Tax Act whose total gross receipts from profession does not exceed Rs. 50 lakhs in a financial year.

Who are the eligible professionals?
Persons engaged in any of the following professions:

• Legal

• Medical

• Engineering

• Architecture

• Accountancy
Technical consultancy

• Interior decoration

• Other notified professionals

o Authorized representatives

o Film Artists

o Certain sports related persons

o Company Secretaries and

o Information technology


How much is the presumptive income to be offered?
Higher of:

• 50% of the gross receipts from profession (OR)

• Income from profession offered by the assessee

Benefits of following this proposed section
Assessee need not maintain books required to be kept u/s 44AA

• Assessee need not get the accounts audited u/s 44AB

When shall the assessee be required to maintain books and to get the accounts audited?
If both the following conditions are satisfied, maintenance of accounts and audit are warranted:

• Income from profession is offered at a rate lower than 50% of gross receipts AND

• Total income of the assessee exceeds the basic exemption limit

If the assessee follows this section, following items shall be deemed to be allowed
All deductions from sections 30 to 38 (including depreciation and un-absorbed depreciation / allowances) shall be deemed as allowed; and

• Written down value (WDV) of depreciable assets shall be recomputed deducting depreciation which is deemed as allowed. E.g. If WDV (10% block) as on 01.04.2016 is Rs. 1,00,000, the depreciation deemed as allowed will be Rs. 10,000 and accordingly WDV as on 31.03.2017 will be Rs. 90,000.