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44ADA for LLP

paras mehta (14 Points)

24 July 2020

Is LLP eligible for 44ADA ?

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Ravi SADhiyan (Practice) (4510 Points)
Replied 24 July 2020

Originally posted by : paras mehta
	Is LLP eligible for 44ADA ?

Section 44ADA is available to LLP

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Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 24 July 2020

Yes, LLP is eligible to get benifit of section 44ADA.

CA ABHAY GUPTA (Practice) (3235 Points)
Replied 24 July 2020

No it is strictly written in section that 44ADA applicable to firm but not LLP

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 24 July 2020

No sir, it's written is section 44AD not in section 44ADA.
Section 44AD is only applicable to Individuals, HUF and Partnerships firm ( excluding LLP)
But section 44ADA is applicable to all resident assessee.

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paras mehta (14 Points)
Replied 24 July 2020

There are two diff answer, please suggest one.
thanks in advance.

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Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 24 July 2020

Sir, According to me LLP is eligible to get benifit of section 44ADA.
but still wait for CA abhay Gupta ji' s reply

CA ABHAY GUPTA (Practice) (3235 Points)
Replied 24 July 2020

I read law, do google consult with senior and colleagues every where and every one is saying that section is not applicable to LLP..even my point of view is same..

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 24 July 2020

Yes, sir
You found at Google every article is saying that, 44ADA is not applicable to LLP, I agree with that
but if you read the section than in 44ADA it's clearly mentioned that " in the case of an assessee, being a resident in India,"
whereas bin 44AD it's mentioned that "in the case of an eligible assessee -means an individual, Hindu undivided family or a partnership firm, who is a resident, but not a limited liability partnership firm

So, All assessee, being a resident in India can take benifit of 44ADA

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Ravi SADhiyan (Practice) (4510 Points)
Replied 25 July 2020

Originally posted by : CA ABHAY GUPTA
	No it is strictly written in section that 44ADA applicable to firm but not LLP

Dear Abhay Sir G

Please quote Provision in which strictly written 44ADA in not applicable on LLP

All CA CLUB Member waiting your valuable opinion.

Thanks With Reagards

Ravi SADhiyan

CA ABHAY GUPTA (Practice) (3235 Points)
Replied 25 July 2020

@ Sagar Patel Ji, you said that section applicable to all assessee or person resident in India means a company can also eligible for this section

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Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 25 July 2020

As per the provisions of Income tax act, 1961 rule made thereunder and plain reading of section, section 44ADA is applicable to all assessee (including LLP, company all)

But its litigative matter and subject to long litigation in court.
No one has litigated this matter till now as I don't find any judgement/case law relating to this.

If you see the form ITR 4 than heading of Form is " [For Individuals, HUFs and Firms (other than LLP)....................having income from business and profession
which is computed under sections 44AD, 44ADA or 44AE or ........]" So this form is not for LLP
This section is for small professional and for small professional,it's not economically viable to go into litigation, So, it's better and advisable for LLP to not to take benifit of section 44ADA.

Note : But if you want to litigated or challenge than you can very well challenge this issue as Act is allowing but IT authority is not allowing as per my view.

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Dinesh Singh (Student) (340 Points)
Replied 26 July 2020

As per Circular No 3/2017 dated 20th Jan, 2017, The scheme will apply to such resident assessee who is an individual, Hindu undivided family or partnership firm but not Limited Liability partnership firm. The circular is attached for your reference.

Attached File : 936601 20200726102749 cbdt it cir 03 20 01 17.pdf downloaded: 168 times