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Section 44ad

khushboo garg (Semi Qualified) (84 Points)

15 July 2013

Dear Friends

A friend of mine has a General Insurance Commision income of Rs. 700000/- and also consultancy fees income of Rs. 115000/-.

Is Sec 44ad applicable? how should she go forward?

Regards

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8 Replies

Ankit (CA, CS) (3064 Points)
Replied 15 July 2013

Khushboo,

The provision says business income and thus, according to me, you can include the insurance commission under it and claim the presumptive rate. however, as far as the consultancy income goes, the same falls under professional income and thus, the presumptive taxation may not apply.

- Ankit

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CA Vap Patel (Practice) (1205 Points)
Replied 15 July 2013

As per Amendments made in Sec 44AD It is now provided that this section will not apply to person having following Income

1. A profession

2.Commission or Brokerage

3 Any Agency Business.

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khushboo garg (Semi Qualified) (84 Points)
Replied 15 July 2013

So general insurance commssion income too would not fall under Sec 44 ad??

khushboo garg (Semi Qualified) (84 Points)
Replied 15 July 2013

Then how should the income be treated??

Pakshal Shah (Practicing Chartered Accountant) (271 Points)
Replied 15 July 2013

44ad is not applicable as both sources of income are specifically excluded. You shall treat the consultancy income as profits frm business n profession whereas commission as income frm other sources.

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Riyaz (accountant) (310 Points)
Replied 15 July 2013

Agree with pakshal shah

Pankaj Agrawal (Advocate) (71 Points)
Replied 16 July 2013

Sorry Mr. Pakshal Shah.

Income from Commission recd from General Insurance should only be treated as income from Business and Profession and beyond the limits u/s 44AD.

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Pakshal Shah (Practicing Chartered Accountant) (271 Points)
Replied 16 July 2013

Originally posted by : Pankaj Agrawal
	Sorry Mr. Pakshal Shah. Income from Commission recd from General Insurance should only be treated as income from Business and Profession and beyond the limits u/s 44AD.