I am a software freelancer and my TDS was deducted under 194JB. My Turnover is between 1.5 to 2 cr. Is an audit required in my case for ITR filing? Also am I eligible for Presumptive Taxation u/s section 44AD? What should I do to get maximum tax benefits?
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Is an Audit required if TDS is deducted under 194JB?
Replies (5)
Quick Summary
Audit is applicable since turnover is above 50Lakhs for profession.
So Audit is applicable and 44ADA can't be availed.
It's not covered by 44AD since it is not business income but professional income
So Audit is applicable and 44ADA can't be availed.
It's not covered by 44AD since it is not business income but professional income
Yes I agreed with Mr Eswar Reddy,
Your income is professional income. The professional income not covered under section 44ad.
Rs. 50 lakhs is Professional income limit for Audit. So, Audit is applicable to Your current income.
Your income is professional income. The professional income not covered under section 44ad.
Rs. 50 lakhs is Professional income limit for Audit. So, Audit is applicable to Your current income.
Audit is applicable. To get maximum tax benefit,
1. Claim depreciation for the computer / laptop used
2. Pay the rent for the places where you worked, if not owned by you
Please note that GST registration is mandatory for you since the taxable turnover exceeds 20 lakhs.. Hope, you have GST registration...
1. Claim depreciation for the computer / laptop used
2. Pay the rent for the places where you worked, if not owned by you
Please note that GST registration is mandatory for you since the taxable turnover exceeds 20 lakhs.. Hope, you have GST registration...
Actual expenses can be claimed
Likely yes. Here's how the limits work:
• Software development or IT freelancing is a notified profession (Sec 44AA(1)). Sec 44ADA (50% presumptive) applies only if gross receipts are up to Rs 75 lakh (with cash receipts 5% or less). At Rs 1.5–2 crore, 44ADA isn't available.
• Tax audit for professionals: Sec 44AB(b) requires audit if gross receipts exceed Rs 50 lakh. The higher Rs 10 crore limit (for less than 5% cash) applies only to businesses, not professions.
• So with receipts of Rs 1.5–2 crore, books (Sec 44AA) and tax audit (Form 3CB-3CD) are mandatory. The ITR is due on 31 October (audit report by 30 September).
• The TDS section (194JB, professional fees at 10%) is consistent with this.
• If you consider it a business (e.g. software product sales rather than services), the audit limit would differ. That's rare for freelancers.
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