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Presumptive taxation scheme

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PAVAN SHURPALI

27 Points Posted on 31 December 2020

my friends father is a labour contractor( sole proprietor) but his entity name ends with word"agencies". So can he opt for presumptive taxation scheme ( sine agency business is excluded from 44AD)

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Quick Summary

This discussion clarifies whether a labour contractor operating as a sole proprietor, whose business name includes the word 'agencies', can utilise the presumptive taxation scheme (Section 44AD). The consensus is that simply having 'agencies' in the name does not automatically classify the business as an agency business, which is excluded from 44AD. As a contractor undertakes specific jobs independently, they are not typically considered agents, making them eligible for the presumptive taxation scheme.

Deepak Gupta

CA Student

8353 Points Posted on 31 December 2020

Just having the word agencies in the name of the business won’t make it an agency business.

The word ‘agency’ is not defined in the act but according to the Concise Oxford Dictionary it means function of an agent or representative, business establishment of an agent.

Whereas, contractor mean a person who undertakes a contract to provide material or labour for a job. Contractor is a person who, in the pursuit of an independent business, undertakes to do specific jobs of work for other persons, without submitting himself to their control in respect to the detail of the work.

So, contractor being independent, won’t be treated as an agent of some other business or establishment. Hence, 44AD presumption scheme can be opted.