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Anil Rego |388 Answers |Ask -Follow

Financial Planner - Answered on Feb 04, 2022

Anil Rego is the founder of Right Horizons, a financial and wealth management firm. He has 20 years of experience in the field of personal finance.
He’s an expert in income tax and wealth management.
He has completed his CFA/MBA from the ICFAI Business School.... more

Question by Ram on Feb 04, 2022Hindi

Money

I'm a freelance software engineer, in a financial year my gross receipts are ₹24 Lakhs, expenses are ₹50,000. Can I opt for presumptive taxation section 44ADA & declare 50% (₹12 Lakhs) as my expense?

If I do so will I be in trouble in the future for underreporting my income & the IT department wants to know the source of remaining income?

And also should I be collecting GST? All my clients are from US & UK.

Ans: Section 44ADA eligibility is based on the nature of services that you provide. Technical consultancy for example is eligible.

Further, one is eligible if your total gross receipts are less than Rs 50 lakh in a year.

Under the Presumptive scheme,

Higher of the following is offered as presumptive income:

50% of the total receipts from the profession Income offered by the assessee from the profession
Actual expenses

By following Section 44ADA, an assessee would get the following benefits:

No need of maintaining books required under Section 44AA
No requirement of having accounts audited under Section 44AB

Considering the complexity, it is better you avail the services of a Chartered Accountant, so that he can look at all the finer details of your case.

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.

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Question by Gopinath - Nov 27, 2020Hindi

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I am an individual professional offering consulting services in the area of Technical consulting. If my income exceeds 50 lakhs a year but less than 1 crore at what rate will I be taxed if I do not have any expenses declared? In such a case will I have to maintain books and be audited by an auditor? Under what section of IT act will I be placed -- Section 44AD?

Ans: As per Section 44AA, of income tax act 1961, you need to maintain books of accounts compulsorily. You cannot be covered under the presumptive taxation scheme as your income is above Rs 50 lakh.Since your gross receipts out of profession exceeds Rs 5o lakh, Tax audit needs to be done. As a consultant, your income is taxed under the head 'Profits and Business or Profession'.

You are allowed to claim expenses on actual basis which have been incurred by you in connection with your work.

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Question by Peeyush - Feb 01, 2024Hindi

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Hi Vivek! I am a software engineer working in Bengaluru. For FY 2023-24, my salary is 20 Lakhs whereas I have earning of 74 Lakhs from IT Consultancy. Do I require tax audit or can I simply apply presumptive taxation on 74 Lakhs as per 44AD and state my final income as 57 Lakhs (20L + 37L) and pay taxes as per tax slab on it. I do have GSTIN and file GST as professional income is more than 20L.

Ans: If you operate more than 1 profession, you have to audit your account books in case the gross receipts of all the professions cumulatively cross rs. 50 lakh
So in your case you need to audit your books

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Asked by Anonymous - Jul 02, 2024Hindi

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Hi Samkit, I have a question for you. I am freelancer (IT sector) and having contract with foreign customers. At the time of filling return for FY 23-24, what should I opt for? under section 44AD or section 44ADA. Thanks

Ans: Section 44AD applies to businesses except for professional services whereas section 44ADA is exclusively for specified professionals. Considering you are a freelancer you are more likely to fall under section 44ADA.

Please consult your CA before moving ahead.

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Asked by Anonymous - Jul 04, 2024Hindi

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Hi Mihir, I have a question for you. I am freelancer (IT sector) and having contract with foreign customers. At the time of filling return for FY 23-24, what should I opt for? under section 44AD or section 44ADA. Thanks

Ans: Technical consultants are eligible for 44ADA. If your services are of the nature of technical consultant, you can opt for 44ADA provided you are withing specified limits of receipts (50 lakh/75 lakh)

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Hi sir, My OBC Certificate issued in 2021. Can I use this in neet 2025 application form for uploading documents? Please explain sir

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Mere pass 2023 ka caste certificate h obc NCL vo neet 2025 ke liye valid h

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Meri 10 or 12 ki marksheet me maa ka naam same h but galt h Ab kase neet ka form bru Kya form barne par mera form reject ho jayega because maa ke documents se meri marksheet me unka naam match nhi ho rha M kase form bru sir Please reply

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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