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Is Affiliate marketing edible for 44ADA (Presumptive Taxation)

Mukesh (Freelancer) (56 Points)

06 March 2023

I would like to know if commisions earned through affiliate marketing is eligible for 44ADA (presumptive taxation).

I spoke with around 5 CAs and also checked many online answers and I'm still confused.

Some say that yes Affiliate marketers are covered in 44ADA as they can be considered as freelancers and others says it's best to go for regular taxation as Affiliate marketing involves commission based payments and hence is not eligible for 44ADA.

Also, what exactly is 44AD and who is eligible for that?

Info on both of these is available online but there is too confusion as different people have different views.

Any clarification would be greatly appreciated.

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8 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (161047 Points)
Replied 06 March 2023

The confusion will remain and may increase by similar answers provided by many members here. Expecting any clarification from members here who make mockery of the platform by liking any copied answer by own fictitious ID is just mirage.

I would suggest you, go deep into different sections here..

First clarify whether sec. 44AA(1) of IT act is applicable to you?

Secondly, check under which section TDS being deducted by your clients.

1 Like

Mukesh (Freelancer) (56 Points)
Replied 06 March 2023

Thanks for your reply. I checked 44AA(1) and the problem as usual is vague categories like - 'Technical Consultancy'. What does that even mean? Another vague phrase that keeps appearing everywhere is this - "other profession as is notified by the Board in the Official Gazette". Again, what does that mean and how are we supposed to find out what these so called 'other professions' are?

I think, when such vague terms are used, confusion is bound to arise not only to regular taxpayers but even to CAs.

Here's another question:

Can a taxpayer listen to what a CA (whom he is engaging) says and in-case of scrutiny tell the authority that he did what the CA told him to do and hence the liability lies with the CA? Or is the taxpayer supposed to use his own thinking (even though he is not qualified to) and take the final call?

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (161047 Points)
Replied 06 March 2023

Tax payer should choose a best tax consultant as per his survey in the industry and then follow his advice.

Mukesh (Freelancer) (56 Points)
Replied 06 March 2023

Originally posted by : Dhirajlal Rambhia
	Tax payer should choose a best tax consultant as per his survey in the industry and then follow his advice.

Agreed. But my question is, in case of scrutiny from the tax authorities, can I tell the authority that I simply followed what the CA told me and hence the entire liability lies with the CA?

For instance, my CA is telling me that I'm eligible for 44ADA. In-case in the future, there is scrutiny and the tax authority says that I'm not eligible for 44ADA and hence I need to pay a fine, can I tell him that it's not my fault but my CA's fault and hence the liability should lie with my CA?

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (161047 Points)
Replied 06 March 2023

Can you sue a surgeon operating your body based on his diagnosis, but you get any adversities due to the operation?

It can be said either your choosing the surgeon was on wrong footing or your bad luck...

1 Like

Mukesh (Freelancer) (56 Points)
Replied 06 March 2023

Thanks for your reply but that's a wrong analogy.

This is because, in case of the doc and patient, there is no govt involved asking for a fine. It's a matter between the doc and the patient and if necessary, the patient can engage the govt or the law at his own discretion. Or he can let the matter go.

In case of taxation, the govt asks the taxpayer to pay the right kind of tax and in the event that he files the wrong tax, he is liable to pay a fine.

So my question was, considering that the tax payer is not a qualified professional (for tax matters) and has to depend on the CA for advice, and considering that the CA suggests that he is eligible for 44ADA, is the CA liable in-case the tax officer asks for a fine (saying that 44ADA is not applicable for the taxpayer)?

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (161047 Points)
Replied 06 March 2023

Analogy is based on professions &, not where or how it is applied.

i.e. the loss incurred by the person by wrong selection of any professional in any field is similar, be it fine or loss or damage....

CA Raj Doshi (Practising CA) (8820 Points)
Replied 06 March 2023

I l give you a practical advice. If your Form 26AS shows incomes on which TDS is deducted under Sec 194H, then it is clearly in the nature of commission. So you see what is before the eyes and listen to your brain. Clearly section 44ADA does not have your activity listed as a profession. So play safe and within your risk appetite.

Clearly,not covered under 44AD or 44ADA to the best of my judgement.

The interpretation of law can only be judged till it is a litigative issue and clarified by various courts.

So yes, a doctor operates based on his knowledge and probable judgement but finally its in God's hands

Similarly, a CA operates based on his knowledge and probable judgement but finally its in Supreme Court's hands

Hope this resolves this query.

There is nothing right/wrong unless you hear it from the tax lawmakers/ interpreters.

2 Like