Section 44ad v/s 44ada - accountancy

Any office set up? staff? nature of expenses?

Originally posted by : Dhirajlal Rambhia
	I had already replied earlier............. ......For sec 44AD...... eligibility creteria  .............BUSINESS is to be established......   I think you got it.....

Dear Sir.,

What is the exact meaning "BUSINESS is to be Established"...?

Theoretically, your's is profession (but not eligible for sec. 44ADA) and as such you should file ITR 3 (AY 2017-18) or its equivalent for next AY....... with books of accounts maintained.......

Though practically some of my colleagues prefer to file it u/s. 44ADA, and in case any defect detected by CPC afterwards..... revise it to ITR3 with same figures..

	What is the exact meaning "BUSINESS is to be Established"...?

Well I have tried to explain it with different examples...... and is practical solution to the contraversial issue, which I would not like to discuss more on this student forum, where we try to find/learn/share the solution in theoretical manner.....

My Dear Sir.,

Thank You for the replies... Also i got some Clarity...

Originally posted by : Dhirajlal Rambhia
	Theoretically, Your's is profession (but not eligible for sec. 44ADA) - Yes Sir Understood. As such you should file ITR 3 (AY 2017-18) or its equivalent for next AY....... with books of accounts maintained....... - Yes Sir Understood. Though practically some of my colleagues prefer to file it u/s. 44ADA - Yes Sir Understood. In case any defect detected by CPC afterwards..... revise it to ITR3 with same figures.. - Yes Sir Understood.

One More Question Please...

In case I'll go to ITR 3 (AY 17-18) with Books of Accounts then Profit will be Shown 50% or 8%...?

This is only My Doubt One of the Important Doubt...

Debatable issue...... Practically, I will go for at least 50%.........

Originally posted by : Dhirajlal Rambhia
	Debatable issue...... Practically, I will go for at least 50%.........

Thank You for the Clarifications and Solutions about My Doubt. The Doubt is in my mind last few Years. Now it's cleared....

As per Your Replies and Solutions with my understandings.... --->

* The Service treat as Profession.

* Profit will be shown @ 50% if treated Profession and can file ITR 4 or ITR 3 in AY 2017-18..

* In case opt 44ADA in AY 17-18 and Dept not accepted then will consider it as Business and File 44AD in Next    AY 2018-19..

Which business code is better for me :

Professionals - 0603 or 0607

OR

Service Sector - 0703 or 0714

Originally posted by : RAJA P M
	Which business code is better for me : Professionals - 0603 or 0607 OR Service Sector - 0703 or 0714

As far as 44ADA is concerned , the only Nature of Bussiness Codes eligible are " 601 to 607 " any thing else will definitely result in "Defective return ".

Thank You My Dear Mr. Dhirajlal Rambhia Sir.,

I got a Best and Suitable Reply from You... It's more helpful for My Works and PROFESSION...

Thanks Once Again...

At times our own light goes out and is rekindled by a spark from another person.

Each of us has cause to think with deep gratitude of those who have lighted the flame within us.

Albert Schweitzer

Thank you........ & CCI.....

Thank you... my friends for  your overwhelming love and support.....

Is a Simple Accountant a “Professional” for Income Tax Purposes?

Short answer:

No, a "simple accountant" (i.e., someone who is not a Chartered Accountant and does not hold a regulated qualification) is not considered a “professional” under the definition used in Sections 44AA and 44ADA of the Income Tax Act.

🧾 Here's Why:

Under Section 44AA and Rule 6F of the Income Tax Rules, the term "profession" includes only certain specified professions, such as:

• Legal

• Medical

• Engineering

• Architectural

• Accountancy ✅ (But this means a Chartered Accountant, not any person doing accounting work)

• Technical consultancy

• Film artist, etc.

So:

• A Chartered Accountant (CA) is a professional under this law.

• A bookkeeper, Tally operator, or independent accountant who is not a CA is not recognized as a "professional" under this definition.

📌 Key Distinction:

✅ What Can a Simple Accountant Do?

• You can still file your ITR as a business (service provider) under Section 44AD — not as a professional.

• Or file under the normal provisions by maintaining books of accounts.

💬 Conclusion:

A “simple accountant” is not treated as a professional for income tax purposes unless registered as a CA.
Therefore, Section 44ADA is not applicable to them.

Let me know more about your work or income type, and I can help suggest the best section and ITR form for you.

A "simple accountant" (i.e., someone who is not a Chartered Accountant and does not hold a regulated qualification) is not considered a “professional” under the definition used in Sections 44AA and 44ADA of the Income Tax Act.

🧾 Here's Why:

Under Section 44AA and Rule 6F of the Income Tax Rules, the term "profession" includes only certain specified professions, such as:

• Legal

• Medical

• Engineering

• Architectural

• Accountancy ✅ (But this means a Chartered Accountant, not any person doing accounting work)

• Technical consultancy

• Film artist, etc.

So:

• A Chartered Accountant (CA) is a professional under this law.

• A bookkeeper, Tally operator, or independent accountant who is not a CA is not recognized as a "professional" under this definition.

📌 Key Distinction:

✅ What Can a Simple Accountant Do?

• You can still file your ITR as a business (service provider) under Section 44AD — not as a professional.

• Or file under the normal provisions by maintaining books of accounts.

💬 Conclusion:

A “simple accountant” is not treated as a professional for income tax purposes unless registered as a CA.
Therefore, Section 44ADA is not applicable to them.

Let me know more about your work or income type, and I can help suggest the best section and ITR form for you.

A “simple accountant” is not treated as a professional for income tax purposes unless registered as a CA.
Therefore, Section 44ADA is not applicable to them.