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Tds applicability for a proprietorship whom 44 ad is applicable and turnover crosses 1 cr

TDS 4302 views 2 replies

Bhadrik Jain

1 Points Posted on 18 July 2023

my client is filing his income tax return under 44 ad presumtivr income , last year his turnover crossed 1 cr , few chartered accountants suggested that tds becomes applicable now and he should deduct TDS and some that it's not applicable since he files return under 44ad , kindly share your valuable input on this

Replies (2)

Quick Summary

TDS provisions apply even if income is declared under section 44AD. If turnover exceeds Rs 1 crore in the previous year, a proprietorship must deduct TDS under applicable sections. Presumptive taxation does not override TDS compliance.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

211643 Points Posted on 18 July 2023

It is to be noted that the provisions for presumptive taxation override only sec 28 to 43C and not the provisions of TDS. Therefore, assessee declaring income u/s 44AD, 44ADA or 44AE is liable to deduct TDS. e.g. Every ‘person’ is required to deduct TDS u/s 192 if the estimated salary exceeds the maximum amount not chargeable to tax. Any individual paying salary of Rs. 5,50,000 p.a. would be required to deduct TDS even though he is

Further, sec 194A, 194C, 194H, 194I and 194J have been amended by Finance Act, 2020.
So after amendment in FA 2020, the persons having turnover of more than Rs. 1 crore but less than Rs. 2 crore and declaring income u/s 44AD would be required to deduct TDS under these sections.