I run a software development business and we get software developed via freelancers and sell them majorely to international clients, my question is can we file returns under 44AD "Presumptive Taxation" and opt for 8% profit even if our profits range is higher than 40-50%?
5 Replies
Eswar Reddy S
(CFO- at NHTF)
(58270 Points)
Replied 20 February 2022
Software development comes under profession and not under business..
If the turnover is above 50lakhs you can't opt for Presumptive Taxation
If the turnover is above 50lakhs you can't opt for Presumptive Taxation
rama krishnan
(12239 Points)
Replied 20 February 2022
I'm not sure whether software profession is covered under section 44AA. whether you are opting for presumptive taxation or under normal provisions of income tax, you are required to report the actual profit
Shalini Agarwal
(CEO)
(82 Points)
Replied 20 February 2022
Hi CA's,
I am not myself developing softwares and not doing anything like making custom software for clients. I get little utilities developed and sell them like an item in shelf. Like you go and buy WinZip software. why can't I not opt for 44AD with 8% profit, the law even says I can take 6% profit into account if all sales are digital?
Thanks
rama krishnan
(12239 Points)
Replied 20 February 2022
You have to report the 8% or 6% of your turnover or actual profit, whichever is higher as your total profit
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