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section 44ada

KAISER MIR (student) (90 Points)

11 March 2018

I have received education Consultancy fee on which tds was deducted under section 194j.Can I opt for 44ada. Please help

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (185379 Points)
Replied 11 March 2018

Yes, provided you are qualified under any of specified Professions like - legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration etc.....(as specified u/s. 44AA of I T act)

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Saifullah Khalid (Autodidact/Curious ) (633 Points)
Replied 12 March 2018

Dhirajlal sir ,

Is Academic Qualification/Degree is a must/pre condition to be qualified as "Professional" ? if so(yes) then will not that be against what Supreme court held in Surti v. State of Gujarat (AIR 1969 SC 63) that “a professional activity must be an activity carried on by an individual by his personal skill and intelligence.”

In today`s world we can see many people involved in high tech professions but academically they are not qualified/degree holders (still they are far far better then so called "qualified" degree holders) . The source of skill/knowledge/intelligence is the hardwork/self study they did over the years....

please enlighten us with your views on same , thank you.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (185379 Points)
Replied 12 March 2018

" Is Academic Qualification/Degree is a must/pre condition to be qualified as "Professional" ? if so(yes) then will not that be against what Supreme court held in Surti v. State of Gujarat (AIR 1969 SC 63) that “a professional activity must be an activity carried on by an individual by his personal skill and intelligence.” ...........

Yes, I totally agree with it....... at the same time this point has been discussed by professionals at many places without final conclusion........

Point is, I have knowledge of medicine (and utilize it for self medication) but I can't practice medicine in general.

I have much better knowledge of law and can defend myself in courts....... but can't plead for third person......... This difference of knowledge and qualification remains silent in practice.

The Apex court has clarified about 'Professional activity'.........

While section 44AA, 44AB, 44ADA etc are applicable to professions (others) and specified professions...... as per eligibility under the act. And here the query relates to section 44ADA..........

Eligible Profession u/s 44ADA

Professionals referred to in section 44AA (1) of the Income Tax Act whose gross receipts in total from profession does not exceed Rs. 50 Lakhs in the relevant financial year.

1) Legal
2) Medical
3) Engineering or architectural
4) Accountancy
5) Technical consultancy
6) Interior decoration
7) Any other profession as notified by CBDT

Authorized representatives
Film Artists
Certain sports related persons
Company Secretaries and
Information technology

(practically, last year CPC had sent so many notices u/s. 139(9), as defective returns...... from that I have learnt that this one is better interpretation, though not negating contrary views.)

(Guest)

Well explained Mr. Rambhia.

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Saifullah Khalid (Autodidact/Curious ) (633 Points)
Replied 12 March 2018

Dhirajlal sir ,

A big thanks for sharing your views , yes I totally agree with your explaination .I also agree on two specific profession domains you pointed out (Medical practioner/Legal advisor/Lawyer) as to be eligible to do practices of these natures one SHOULD HAVE academic qualification as prerequsite to practice in court requires you to be a member of Bar and for same you should have a law degree (same follows in medical practice domain )....but now here is the catch ... professions in nature "Engineering/Technical consultant" can be carried on independently without any special affilation to any institution ...

So I think in some "nature of professions" holding a Academic degree is relevant (in context of 44ADA) and in some "nature of professions" Academic degree is irrelevant .

Originally posted by : Dhirajlal Rambhia

(practically, last year CPC had sent so many notices u/s. 139(9), as defective returns...... from that I have learnt that this one is better interpretation, though accepting contrary views.)

Above seems to have happened as department has not done the home work , majority of defective returns were due to non selection of appropriate "Nature of Bussiness" code .... the number of such codes were very limited (601 to 607) ... hopefully this year department will add more "Nature of Bussiness" codes to be eligible to be opted under 44ADA .

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (185379 Points)
Replied 12 March 2018

Khalid Bhai,

Following are some examples in practical life......

1. Accepted that Medical profession should have academic qualification' so strictly that even M.D. Physician, cannot burn his fingers in surgery, which is monopoly of only a surgeon...........

But irony is that some of my clients are legally running hospitals u/s. 44AD (even after having medical qualifications)........

2. Well, all the specified professions are regularized by some regulating authority having its own rules and regulations and code of conduct..........

For example an engineer cannot sign building plan, but only an Architect can do.

3. Audit reports of Gitanjali Group can be signed only by a COP holder like Shri Sanjaykumar Rambhia and not by Shri Lalu Yadav........

If both of them are behind bars at present, that is due to misconduct of their respective codes, while ITD has given clean chit to both of them.

This implies...... ITD has silently accepted these codes for specified professions, and has not bothered to interefere; but segregated 'other professions' from 'specified professions'

And Section 44ADA is applicable to 'specified profession'