Does my work come under Business or Profession of Presumptive taxation?

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Ajju Dev

Software Engeneer

48 Points Posted on 08 March 2022

I am a software developer. I make and publish apps in the Google play store.

My main source of revenue is from the sales of my apps and revenue from Ads.

I have learned that Google Adsense income comes under Business and not a profession.

- So can I opt for 44AD instead of 44ADA?

- Or should I show both separately like 44AD for Advertising Income (Business code 16006 - Advertising) and 44ADA for sales of the app (Business code 14001 - Software development)?

Thank you.

Replies (8)

Quick Summary

This discussion explores whether a software developer's income from app sales and Google AdSense should be classified as business or profession for presumptive taxation purposes. While software development is generally considered a profession (potentially falling under Section 44ADA), ad revenue might be treated as business income (under Section 44AD). The consensus suggests it may be possible to declare income under both sections, provided the business income qualifies for 44AD.

Eswar Reddy S

CFO- at NHTF

15022 Points Posted on 08 March 2022

Software developer comes under profession.. Without a professional qualification like software , you can't do that work.

So it's profession.You may apply for 44ADA

sabyasachi mukherjee

Profession

19978 Points Posted on 09 March 2022

Presumptive taxation is a seperate part altogether.Everyonre can render service in whatever way he likes its as per his choice.

Eswar Reddy S

CFO- at NHTF

15022 Points Posted on 09 March 2022

To opt for Presumptive Taxation one must ascertain whether it is business or profession.

After this , one has to findout whether it is eligible business or profession for 44AD/ 44ADA

sabyasachi mukherjee

Profession

19978 Points Posted on 09 March 2022

Sec 44ADA AND SEC 44AD DEALS WITH THE FOLLOWING:
1. The assesse is resident and engaged in a profession referred to in Sec 44AA(1)
2. GROSS RECEIPTS OF THE ASSESSE DOES NOT EXCEED RS.50 LACS
3. ALL DEDUCTIONS FROM SEC 30 TO 38 ARE APPLICABLE
4. THE WRITTEN DOWN VALUE IS CALCULATED FROM SEC 30 TO SEC 38 INCLUDING DEPRECIATION
SEC 44AD 8% OF THE TURNOVER.

JJJ

Need help

436 Points Posted on 09 March 2022

Originally posted by : sabyasachi mukherjee
	Sec 44ADA AND SEC 44AD DEALS WITH THE FOLLOWING:1. The assesse is resident and engaged in a profession referred to in Sec 44AA(1)2. GROSS RECEIPTS OF THE ASSESSE DOES NOT EXCEED RS.50 LACS3. ALL DEDUCTIONS FROM SEC 30 TO 38 ARE APPLICABLE4. THE WRITTEN DOWN VALUE IS CALCULATED FROM SEC 30 TO SEC 38 INCLUDING DEPRECIATION SEC 44AD 8% OF THE TURNOVER.

The first line of your copy-pasting job does not reconcile with the rest of it. Nor does it remotely address the query!

Now, to answer the actual query, this income from software development will almost certainly be considered as professional income and subject to 44ADA and a 50 lakh gross receipts.

As for the revenue from Google, your situation may be different, but typically this will be incidental to your primary income generating activity.

I have read / heard of people returning part of their income under one section and another part under another section to take the most advantage of tax rates, but it's not something I can comment on with any certainty.

Ajju Dev

Software Engeneer

48 Points Posted on 11 March 2022

Originally posted by : JJJ
	Originally posted by : sabyasachi mukherjee Sec 44ADA AND SEC 44AD DEALS WITH THE FOLLOWING:1. The assesse is resident and engaged in a profession referred to in Sec 44AA(1)2. GROSS RECEIPTS OF THE ASSESSE DOES NOT EXCEED RS.50 LACS3. ALL DEDUCTIONS FROM SEC 30 TO 38 ARE APPLICABLE4. THE WRITTEN DOWN VALUE IS CALCULATED FROM SEC 30 TO SEC 38 INCLUDING DEPRECIATION SEC 44AD 8% OF THE TURNOVER. The first line of your copy-pasting job does not reconcile with the rest of it. Nor does it remotely address the query! Now, to answer the actual query, this income from software development will almost certainly be considered as professional income and subject to 44ADA and a 50 lakh gross receipts. As for the revenue from Google, your situation may be different, but typically this will be incidental to your primary income generating activity. I have read / heard of people returning part of their income under one section and another part under another section to take the most advantage of tax rates, but it's not something I can comment on with any certainty.

So can I classify my Google Adsense income as 44AD?

My primary income generating activity is Ads by Google Adsence and other Providers like Google. so can I opt for 44AD?

Ajju Dev

Software Engeneer

48 Points Posted on 11 March 2022

Originally posted by : Eswar Reddy S
	To opt for Presumptive Taxation one must ascertain whether it is business or profession.After this , one has to findout whether it is eligible business or profession for 44AD/ 44ADA

That is the Issue here. My Income stream comes from both Business and Profession.

Software Development comes under Profession. Ad revenue from Google comes under Business Income. So my doubt is should I go with 44AD or 44ADA or Both?

cheers