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Applicability of 44ADA if profit is 80 % of income

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the_spiderman

Taxpayer

26 Points Posted on 02 August 2022

I'm a independent professional and my income is less than 50 lakhs. I'm eligible for 44ADA but I have one query, If my expense is about 20% and my profit is about 80%, am I still eligible for 44ADA and can claim 50% profit?

Is there such rules like I must have at least 40% expense to avail 44ADA benefit or anyone regardless of their expense (even if it's 5%) can can claim 50% profit under 44ADA?

Thanks!

Replies (5)

Quick Summary

This discussion clarifies the applicability of Section 44ADA for independent professionals with a high profit margin of 80%. It confirms that there is no minimum expense requirement to claim the benefits of 44ADA. Professionals can declare a profit margin higher than the stipulated 50%, including their actual 80% profit, under this section.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121476 Points Posted on 02 August 2022

There is no cap on expenditure. The act says, minimum profit margin should be 50%, it can be higher as declared by assessee.

the_spiderman

Taxpayer

26 Points Posted on 02 August 2022

Originally posted by : Dhirajlal Rambhia

There is no cap on expenditure. The act says, minimum profit margin should be 50%, it can be higher as declared by assessee.

Thanks for your reply sir. To clarify, If I have 80% profit of my income, I need to declare 80% profit under 44ADA or I need to declare flat 50% profit regardless of my profit margin?