Presumptive tax for individual business

1. Select Sec. 44ADA

2. Minimum 50% profit margin.

3. Yes, otherwise interest charged.

4. No.

Thanks Sir,

1. Select Sec. 44ADA

Is this confirmed? He is not a professional he is doing software development for multiple clients? So this should 44AD or 44ADA?

2. Minimum 50% profit margin.

Can you please explain more?  SO suppose his gross receipts for a year is Rs 18 Lakhs the tax to be paid is

a) 6% i.e Rs  1.08 Lakhs ? 
b) 8% i.e Rs  1.44 Lakhs?
c) 50% i.e Rs 9 lakhs ?

which amount should be paid as income tax?

Thanks

Shanthi

1. sec. 44ADA is based on the services provided by him. He can otherwise declare his income under normal assessment.

2. Under sec. 44ADA. 50% is minimum.

Thanks. Sir

Thanks for all answers

I assume he falls under 44ADA even though he has registered in MSME as proprietorship and also pays salaries to a few part time employees from time to time but he operates through individual current account

Regards

Shanthi

Yes, service provider can also register as proprietor under MSME, and can hire employees.

Originally posted by : Dhirajlal Rambhia
	Yes, service provider can also register as proprietor under MSME, and can hire employees.

Thanks Sir. So even though he has registered in MSME and hires employees he will be considered in 44ADA and not in 44AD?  

The services provided are not eligible to be assessed under sec. 44AD of IT act.

You can either declare it under sec 44ADA or file the income normal assessment.

Thanks Sir now I'm clear.

Final question Sir.

Suppose client turnover is 18 lakhs and export of services is Zero Rated GST so anyway client shows GST separate in his invoice, client either shows LUT or gets refund for paid GST in this case

Under section 44ADA taxable income is 

a) 9Lakhs (50% of 18 lakhs) 

b) 7.38 Lakhs (50% of 18 lakhs - 18% GST)

So it is a) or b) Sir

Thanks

Shanthi

Based on Rs. 9 lakhs turnover.              

Thanks Sir. Thanks a lot for patiently answering all my queries

Thanks Sir. Thanks a lot for patiently answering all my queries

You are welcome.                    

Hello Everyone,

So under section 44ADA advance payment of tax can I choose the following

Assessment Year * 2024-25

Financial Year is 2023-24

for the selected

Assessment Year 2024-25

Type of Payment (Minor Head) * Advance Tax (100)

Tax Applicable (Major Head) is Income Tax (Other than Companies)(0021)

Are all the above chosen fields correct?

Thanks

Shanthi

Yes, its correct.