Sec.44 ADA

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Rajkumar Gutti

894 Points Posted on 13 June 2024

I am employee from 01.04.23 to 30.09.23
& getting salary.

From 01.10.23 & onward I am working as a consultant as professional work ,& getting remuneration On remuneration tds is deducted.

For F.Y 23 - 24 income tax return followings are my queries.

1) Can I avail full deduction like as standard deduction, HRA & Exemption up to threshold limit as employee salary.

2) Can I required to file two return i.e. Income from salary & Income from professional work or one return

3) For professional work I prefer to choose presumptive Tax scheme u/s 44 ADA

Pl.guide how compute the both income

Replies (9)

Quick Summary

This discussion addresses an individual's income tax queries after transitioning from employment to working as a consultant. Key questions cover eligibility for standard deductions, HRA, and threshold exemptions, whether to file one or two tax returns, and the application of the presumptive tax scheme under Section 44 ADA. It also clarifies the tax exemption status of provident fund and gratuity received upon retirement, citing relevant sections of the Income Tax Act.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

212577 Points Posted on 13 June 2024

1. Yes.

2. Only one return ITR3/4

3. Eligible.

Rajkumar Gutti

894 Points Posted on 13 June 2024

One more question remain sir,
I received provident fund, gratuity after retirement .
Is this exempted , if yes , which section. Is this amount mandatory to show in IT return

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

212577 Points Posted on 13 June 2024

Gratuity received at the time of retirement Sec. 10(10) IT act

Gratuity received by Government Employees (Other than employees of statutory corporations) Fully Exempt

Death -cum-Retirement gratuity received by other employees who are covered under Gratuity Act, 1972 (other than Government employees) (Subject to certain conditions).

Least of the following amount is exempt from tax:

1. (*15/26) X Last drawn salary** X completed year of service or part thereof in excess of 6 months.

2. Rs. 20,00,000 ( increased the tax exemption limit on gratuity to Rs 25 lakh from earlier 20 lakh)

3. Gratuity actually received. *7 days in case of an employee of a seasonal establishment. ** Salary = Last drawn salary including DA but excluding any bonus, commission, HRA, overtime, and any other allowance, benefits, or perquisite

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

212577 Points Posted on 13 June 2024

Any payment received from a Provident Fund, (i.e. to which the Provident Fund Act, 1925 applies) is exempt. Sec. 10(11) IT act.

Any payment from any other provident fund notified by the Central Govt. is also exempt.

The Public Provident Fund(PPF) established under the PPF Scheme, 1968 has been notified for this purpose. Besides the above, the accumulated balance due and becoming payable to an employee participating in a Recognized Provident Fund is also exempt to the extent provided in Rule 8 of Part A of the Fourth Schedule of the Income Tax Act. {sec. 10(12) IT act.}