Live Course on Drafting of Appeal and Reply of Penalty Notice by CA Sachin Sinha. Register Now!!

What is Nature of Business and the Business code for the Google Adsense Income?

Ajju Dev (Software Engeneer) (28 Points)

11 March 2022

What category does Income from Google Adsense come under? Is it 44AD or 44ADA under ITR-4?

My revenue is from Advertisement Earned in my app published in Playstore. I use Ad Networks like Google Adsense and others.

What is the Business code for such income?

Can I use 16006 - Advertising for this?

Reply
Follow
Share

2 Replies

Eswar Reddy S (CFO- at NHTF) (58213 Points)
Replied 11 March 2022

AdSense is not the basis for 44AD/ 44ADA .

It depends on the nature of activity..

Advertisement is the professional work .

It comes under 44ADA unless there is a contract..

Under which section tds has been deducted ?

2 Like

JJJ (Need help) (673 Points)
Replied 11 March 2022

I'm no expert, but I have to agree with Mr Ready that the nature of the primary income generating activity is the determining factor.

Not necessarily the TDS, because you don't decide whether or not to deduct TDS and what section / rate to apply for this TDS deduction. The same activity may have different meanings for the provider and recipient.

That said, there is definitely a lot of room for interpretation because of the lack of clarity on the meaning of "business" when it comes to income tax. And the only way you will know if you can use (or get away with) 44ADA is to is to try it by returning your income under this option. At worst it will not be accepted and you will be asked to re-file and pay the applicable shortfall / interest etc. You should be prepared to accept that, if it comes down to it.