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Applicability of section 44ada

Melvin Joseph (Founder and chief financial planner) (40 Points)

13 February 2017

Hi, I am a Certified Financial planner (CFP) registered with SEBI as an Investment Adviser. My income is the fees paid by clients. I am not selling any products and not getting any commission income. Can I file return under Section 44ADA and declare 50% of my fees as income and pay tax on it.

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4 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (178099 Points)
Replied 13 February 2017

Yes

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Melvin Joseph (Founder and chief financial planner) (40 Points)
Replied 13 February 2017

Thank you Mr. Rambhia. But there is a confusion among some Chartered Accountants because the profession Financial Planner is not specifically mentioned in the list by CBDT.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (178099 Points)
Replied 13 February 2017

Yes, because literally accountacy is taken as just profession of chartered accountants. The section 44ADA has specified all the professions as listed in section 44AA(1), and is silent about other vocations or related professionals. The section lately introduced, doesn't have any case laws till date, but in broad meaning it is applicable to professionals. Any profession having work related to mental skill requiring specific qualification in the area, and which is not trading or manufacturing, can be assesed under this section. One more question is: if you are not professional, then are you businessman? Because as per IT act, your income comes under PGBP!!