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section 44ad where multiple business or profession exists

24 July 2011

I am having two types of business i.e. one business is a sole proprietorship and other is professional services (means an insurnace agent or post office agent).

I am having a query that the application of section 44AD is to be applied separately on both the case or the application of section is made on combined considering basis.

As in my case the margin in sole proprietorship is below the required margin and in professional services it quite higher side.

So please provide a proper guidance.

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3 Replies

Chintan (Accounts and Finance Executive CS Executive Pursuing) (98 Points)
Replied 24 July 2011

Dear Abhishek , section 44 AD is only applicable to business and not on professional services , but wait for experts comments.

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Manoj BG (Tax Professional and in Service) (1795 Points)
Replied 24 July 2011

Dear Abhishek

Presumptive taxation scheme under section 44AD would be applicable only for business and not for profession.

Hence, u have to apply 44AD only for business income and not for professional income. Since ur business income is lower than 8% of the gross receipts of ur business, u have to get ur accounts audited by chartered accountant us 44AB if u want to claim net profit below the presumptive profit us 44AD.

As per my view, insurance agency and post office agency is not at all profession as it doesnt satisfy defination of profession specified us 2.

Hope this solves ur query.

Thanks and Regards,

Manoj B Gavali

Thanks and Regards