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Applicability of section 44ada for contract based employees

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zalak shah

67 Points Posted on 08 October 2020

Mr A worked in company X as an employee for the month of April in P.y.2019-20. He then left the job and joined company Y fr the month of September till 31/3/20 as a contract based employee wherein tds under section 194J is deducted and no other benefit is recieved by him. His income as contractual employee is less than 50 lakhs.
he also has capital gain income.

1. Can Mr A file itr 4 u/s 44ada
2. How to calculate gross receipts in this case?

Replies (6)

Quick Summary

This discussion explores whether contract-based employees, like Mr A who worked for Company Y, can utilise Section 44ADA for presumptive taxation. It clarifies that while Section 44ADA is generally for professionals, certain technical or managerial services might qualify. The thread also advises on calculating gross receipts and highlights the necessity of filing ITR 3 due to capital gains, even when using presumptive income under 44ADA.

Sagar Patel

Tax and Business Consultant

5533 Points Posted on 08 October 2020

What is his Profession ?
which services given on contract base...

zalak shah

67 Points Posted on 08 October 2020

Technical service

Sagar Patel

Tax and Business Consultant

5533 Points Posted on 08 October 2020

Can you elobrate which type of technical services, because all technical services are not eligible for Section 44ADA.

if it's eligible, than you can show that income under 44ADA (Gross receipt means total Income Receipt from that contract).

You have to file form ITR 3 as you have a Capital Gain. (But in that form also you can show your professional income under Presumptive Taxation)