blue (Others) (35 Points)
15 July 2014I am planning to setup a sole propritorship for handling an outsourcing assignment where I need to provide 3 resources for a US company. These resources will be doing online marketing activities.
I need to know if this company will be considered as a Business or a Profession for 44AB audit? Not sure if the above activities will fall under the purview of Information Technology.
Also, if it's considered as a business can I do the 8% tax under 44AD without book-keeping?
Fenil Shah
(Audit & Tax Executive)
(402 Points)
Replied 15 July 2014
It depends on that you are a professional (Person having Specialised Qualification in the respective field) or a businessman.
If you are doing business then you can avail the benifit u/s 44AD & show your income @ 8% of your turnover.
blue
(Others)
(35 Points)
Replied 15 July 2014
Thanks for the answer. In this case the proprietor of the firm doesn't has a background in services being offered. Employees will be hired to perform the services. So, as far as I understand - this will be considered as business, right?
Also, if I use 44AD, will I need to maintain books of account?
Fenil Shah
(Audit & Tax Executive)
(402 Points)
Replied 15 July 2014
Yup, It'll be business & there is not need to maintain detailed books of accounts u/s 44AD; but basic books of accounts as will help to determine your turnover needs to be maintained.
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