Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

44AD and high-margin business

19 February 2022

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%?

Reply
Follow
Share

5 Replies

CA Aakarsh Jain (CA) (10346 Points)
Replied 20 February 2022

Yes you can

1 Like

Upgrade to CAclubindia Pro. Subscribe Now!

Eswar Reddy S (CFO- at NHTF) (58263 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

1 Like

rama krishnan (12234 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