Presumptive income by Professional

This query is : Resolved

P.Harish (Querist)
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24 July 2021 Dear experts Sir/ Madam
Can you please solve following queries
A Technical person , Senior Citizen, is drawing monthly salary ₹2 lac per month as a director from a company , He also getting ₹ 3.5 lac per month as consulting engineer services from others. He wants to pay tax U/s 44ADA .

Would he be eligible to claim 3.5 *12 = ₹42 lac under presumptive "income from business profession" 8% & rest ₹ 24 Lac under "salary"?
Kindly elaborate.

CMA Poornima Madhava

CMA Poornima Madhava (Expert)
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24 July 2021 Yes, he may opt for 44ADA in respect of professional income even if he is earning salary in addition. Profit @6% in case of no-cash transactions.

P.Harish

P.Harish (Querist)
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24 July 2021 Thanks for reply mam , another one thing is there , is it necessary to spend some amount as exp rec'd from professional engineers service ? .If no such amt is spent &,all is kept in bank acct , withdrawals some only for routine exp. Somebody told me that for presemptive income ,gross receipts should not be more than 50 lakhs but here gross receipts is more than 50 lakh . Kindly advise

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CMA Poornima Madhava

CMA Poornima Madhava (Expert)
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24 July 2021 By spending, if you mean spend money out of the income that has already been earned, there is no such requirement. Income earned will be taxed, whether the balance money is spent or not is irrelevant for this purpose.
W.r.t. to gross receipts, you are right. To avail 44ADA, 50 lacs turnover/receipts is the limit but this does not include salary income. In your case, professional income is 42 lacs and hence you may opt for 44ADA.

P.Harish

P.Harish (Querist)
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25 July 2021 Lot of thanks for guidance in the matter madam .🙏🙏