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Is an Audit required if TDS is deducted under 194JB?

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Darshan Shah

6 Points Posted on 09 September 2023

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?

Replies (4)

Quick Summary

If your turnover as a software freelancer falls between £1.5 to £2 crore and TDS was deducted under section 194JB, an audit is likely required. This is because your income is considered professional, exceeding the £50 lakh threshold for mandatory audits, and therefore, presumptive taxation under sections 44AD or 44ADA is not applicable. To maximise tax benefits, consider claiming depreciation on business assets and deducting rent for your workspace. Ensure you have GST registration as your turnover exceeds the £20 lakh threshold.

Eswar Reddy S

CFO- at NHTF

58280 Points Posted on 09 September 2023

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

RAJA P M

"Do the Right Thing...!!!"

128157 Points Posted on 09 September 2023

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.

Senthil Kumar

Articles Assistant

52 Points Posted on 11 September 2023

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...