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Section 44ad

Tanvi Patel (Deputy Accounts Manager) (95 Points)

06 July 2018

Person rendering services is eligible for Section 44AD or person doing business are eligible for Section 44AD????

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177896 Points)
Replied 06 July 2018

The presumptive scheme u/s.44AD can be opted by Resident Individual/HUF/PF having eligible business. Business can be trading business or rendering any service, e.g. labour contractor, painting or plumbing services, vehicle maintainance workshop etc.

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CA Urvi Gandhi (.) (347 Points)
Replied 06 July 2018

Person doing specified business are eligible for Sec 44AD. For person rendering professional services, Sec 44ADA is there.

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Anjali P Nair (ACA,ACMA) (582 Points)
Replied 06 July 2018

Person rendering services other than specified profession covered under section 44ADA such as

Engineering
Legal
Architectural profession
Accountant
Medical
Technical consultant
Interior business

can opt for 44AD.

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Dineshchandan (articled assistant) (84 Points)
Replied 06 July 2018

The following are not eligible for 44AD:

1. income in the nature of commission or brokerage

2. agency business.

3. Legal, medical, engineering or architectural profession

4. profession of accountancy or technical consultancy or interior decoration.

(Reference: S. 44AD(6) & S. 44AA(1))

So, if the person is rendering services which doesn't fall in above catogory, then yes they may opt for presumptive taxation. However, keep in mind that once 44AD is opted, the same needs to be applied for next 5 consequitve years. If opted out of 44AD during these 5 years, the benefit of 44AD cant be availed for the next 5yrs from yr in which opted out. (Ref. S. 44AD(4))

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