Save Rs 499 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

Presumative Taxation for salary and professional income

475 views

Save Share

vignesh tk

6 Points Posted on 20 May 2021

I am working as a software professional with salary of 5Lakhs per annum and I am doing a freelancing job which also fetching me 5 Lakhs per annum(profit is more than 50%). Will I be able to take the benefit of 44AD?
What will be I total Taxable Income?
Do I need to maintain a book of accounts?
Is it legal or illegal to take benefit if I have both salary and professional income?

Thanks
Vignesh

Replies (7)

Quick Summary

This discussion clarifies presumptive taxation rules for individuals with both salary and freelance income. While salary income is taxed normally, freelance professionals can potentially use Section 44ADA to declare 50% of their receipts as taxable income. Having salary income does not prevent you from opting for 44ADA for your professional earnings, and maintaining books of accounts might be necessary depending on your specific circumstances.

veerendar singh

tax consultant

3306 Points Posted on 20 May 2021

No you cannot go for 44AD to compute your income. in your case income will be determined as per books of accounts.

prasad Nilugal

3924 Points Posted on 20 May 2021

Section 44AD is for Business and Section 44ADA for profession , So if you are professional , you can not opt for 44Ad.

CA. Sourav Sarkar

Chartered Accountant

24588 Points Posted on 20 May 2021

Yes books of accounts should be maintained.

Sivaramaraju G

Learner

2398 Points Posted on 20 May 2021

You can go with 44ADA for freelancing income vignesh ji and you have to offer a minimum 50% of freelancing receipts as your professional income.
I saw your another question may be due to wrong question you asked earlier again you are asking right??

in this case your gross total income will be 7.5L (5L+2.5L(50% of 5L)).

vignesh tk

6 Points Posted on 20 May 2021

Can you please explain me why am I not able to take benefit of 44ADA? Is it because I have income from salary as well as freelancing? Can I take presumptive taxation only for my freelancing amount?

Sivaramaraju G

Learner

2398 Points Posted on 20 May 2021

Obviously you can go with 44ADA as software profession is a specified profession as per act to opt for 44ADA. having salary income doesn't prevent you from taking 44ADA benefit.