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Section 44ADA without incurring any expense

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Abhay

Others

36 Points Posted on 03 May 2020

If a professional eligible to take the benefit of Section 44ADA is making an income say 20 lakh in a financial year and his expense is around 50,000, can he still use the presumptive income route without incurring any expense.

Further, what happens say professional's income is 55 lakhs. In such situation would he be better off at clocking revenue of 50 lakhs and not more as he will save more in taxes by taking the presumptive income route than the gain through additional income.

Replies (3)

Quick Summary

This discussion explores the applicability of Section 44ADA for professionals with minimal expenses. It clarifies that if your gross receipts are up to £50 lakh, you can opt for the presumptive income route, declaring 50% of your income even if actual expenses are negligible. However, if your income exceeds £50 lakh, you cannot avail this benefit and must prove your turnover is within the limit.

Abhishek Kumar Gupta

Article

97 Points Posted on 03 May 2020

If u r eligible for sec. 44ada then u may declare 50% income even if ur expense is zero.

u r eligible 4 sec. 44ada if ur gross receipts is upto 50 lacs. if ur actual income is 55 lacs then u cannot avail this benefit. its ur responsibility to prove that ur income is 50 lacs and not 55 lacs.