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44ad

CA. sanjeet Kumar Ojha (Chartered Accountant) (272 Points)

23 July 2014

My wife is providing Tuition Services. her qualification is B.Com(H). I want to tax under section 44AD (Presumptive Basis). Is my contention Correct ??

Reply , urgent.....

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10 Replies

CA R SEETHARAMAN (CA Practice ) (146634 Points)
Replied 23 July 2014

Tax under section 44AD (Presumptive Basis) is applicable only for business income. Tuition services will not be covered under 44AD.

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CA. sanjeet Kumar Ojha (Chartered Accountant) (272 Points)
Replied 23 July 2014

Originally posted by : SEETHARAMAN
	Tax under section 44AD (Presumptive Basis) is applicable only for business income. Tuition services will not be covered under 44AD.

Thanks for reply.

44AD excludes only those professions which are specified in Sec 44AA. and Tuition by a B.Com Level person is not specified in 44AA. So, We can tax u/s 44AD.

My Question is that, whether 44AD excludes all professions or only specified professions under section 44AA.

Please answer .

Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 23 July 2014

you can either show income from tuition under 44ad or under other sources.. in your case, 44ad is appropriate according to me.

CA R SEETHARAMAN (CA Practice ) (146634 Points)
Replied 24 July 2014

As Section 44AD specifically mentions the word business, therefore section cannot be applied in case of professionals.

CA. sanjeet Kumar Ojha (Chartered Accountant) (272 Points)
Replied 24 July 2014

Thank you seetharaman

I agreed with you.

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CA. sanjeet Kumar Ojha (Chartered Accountant) (272 Points)
Replied 24 July 2014

Originally posted by : Tribhuvan Aditya Singh
	you can either show income from tuition under 44ad or under other sources.. in your case, 44ad is appropriate according to me.

Please tell me the basis of taxing under other source and not under PGBP.

Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 24 July 2014

@ sanjeet.... tuition income can be taxed under other sources when a person does not have a proper coaching centre where tuitions are provided, rather it is provided at home or when it is provided on part time basis.

CA Himanshu Bansal (Risk Manager) (2345 Points)
Replied 25 July 2014

First of all, it shall not be tenable to offer it for tax under section 44AD. Intent of law is to benefit the business class and exclude service/professional class. Even if you use section 44AD this could be a matter of litigation at later stages and chances would be ruling with the intention of the law.

Now showing it as income from other sources or PGBP, it depends on the nature and scale of business. If the coaching receipts are substantial and there are seperate expenses like staffing, coaching premises rentals, computers, etc, then it shall be appropriate to show it under PGBP.On the contrary if the scale is small and there no substantial expenses relating to that, offer it as income from other sources.

I hope it helps to some extent.

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CA Final & Prof. Lawyer (Article/Student) (39 Points)
Replied 29 March 2018

MY BROTHER PROVIDES CHEMISTRY TUTION CLASSES TO 11th & 12th CLASS HAVING A STRENGTH OF 80 STUDENTS. WITH ANNUAL INCOME ABOUT 3.30 LAKH. UNDER WHICH SECTION HIS INCOME IS TAXABLE 44AD OR 44ADA