Section 44ad for online software selling

1. Yes, As per the provisions of section 44AD, from the net income computed at the prescribed rate, i.e., @ 8%, an assessee is not permitted to claim any deduction under sections 30 to 38 (including depreciation or unabsorbed depreciation) from such income. However, in case of an assessee, being a partnership firm, further deduction on account of remuneration and interest paid to its partners within the limit specified under section 40(b) is allowed. Thus, in this case the firm can claim further deduction on account of remuneration and interest paid to its partners within the limit specified under section 40(b). section 40 (b) deals with limits of remunaration and interest payment.

Thank you for quick response Luvish Jain and sarath,

But some assessee's have been telling when submitting ITR4 form with a business code "Software Development Agency", the submission was rejected with "defective return". Thats y we are confused.,

see reference: https://www.taxfull.com/5906/received-a-notice-under-section-139-9-for-defective-returns

All computer related businesses are listed under "Service Sector" in business codes listed by income tax department.

Regards

Muthu