Benefits: No Audit No need to maintain Book of Accounts
Limit: 8% for Business if less than 2 crore turn over (44Ad), 50% of Professionals less than 50 lakhs income (44ADA), Transporters 7500 for month income / vehicle (section 44AE)
Opting: Minimum 5 years for opting next 5 years under this scheme
NOTE: This scheme Only Applicable for Individuals & HUF Not partnership firm, for LLP, PVT firms (FORM -5)
Eligibility for 44 AD (Business):
Rule: Not claim under deductions under a firm or person 10A, 10AA, 10B, 10BA persons 80HH to 80 RRB.
All Business & except the following categories
- Technical consultancy
- Agency Business
The main thing is the Proper Business Code for This Section
Business codes that are not under 44 AD from AY 2018-19 onwards
from FY 2017-18 or AY 2018-19 The business codes increased 3 times. you can check ITR Business Code List here
14005 >> Other IT-enabled services
Notice 139/9 under section 44 Ad
Subject: Final Reminder – Notice u/s 139(9) of Income Tax Act, 1961.
Communication u/s 139(9) for PAN for the A.Y.2018-19
Please find attached the defective return communication u/s 139(9) from the Income Tax Department, Centralized Processing Center (CPC) with respect to the return of income filed by you for the PAN and Assessment Year 2018-19.
As per Section 44AD(6) of the Income Tax Act, 1961, the
provisions of Sec.44AD are not applicable to – (1) persons
carrying on professions that are referred to in
Sec.44AA(1), (2) persons earning income in the nature of
commission or brokerage, and (3) persons carrying on any
As seen from the return of income filed,
the nature of business code mentioned is which falls in the
categories mentioned above. Hence, the provisions of
Sec.44AD are not applicable, in your case.
As the provisions of Section 44AD are not applicable, in
your case, the claim of computing profits and gains of
business on a presumptive basis, under this special provision
is not allowable. Hence, the above defect has to be
corrected by way of computing the profits and gains of
business under the normal provisions and not under
Sec.44AD and offering the same.
2nd case scenario
Subject: Notice u/s 139(9)of Income Tax Act, 1961.
Ref: Section 143 [1B] Income Tax Act, 1961 read with Clause 2 C (iv) of Centralized Processing of Returns Scheme 2011,
143(1), assessment without the presence of taxpayer.
143(3), Scrutiny assessment.at the presence of taxpayer.
143 [1B] invalid return section
disallowed if such return is filed after the due date.
- deductions claimed under section 80 (C,D,G)
- Carry forward loss in the previous year
- expenditure shown in the audit report but not claimed in itr.
- income Form 26AS ( (Tax Credit Statement)) or Form 16(TDS from employer) or Form 16A (TDS by the bank, insurance) added.
Notification No S.O 17(E) dated.
Error Code 86 same your business does not fall under section 44 Ad.
44ADA >> professions covered in u/s 44AA(1).
44ad nature of the business list,
unfortunately, there is no specified business code list available under 44ad but you can read Income tax Section 44 Bare ACT
in this all the business except (commission agency, software consultancy).
maybe all the business in Computer and it Enabled services not allowed under 44ad.
COMPUTER AND RELATED SERVICES
Other software consultancy 14002 >>> got notice
Other IT enabled services 14005 >> got notice (source CA forum)
- Software development 14001
- Other software consultancies 14002
- Data processing 14003
- Database activities and distribution of electronic content 14004
- Other IT-enabled services 14005
- BPO services 14006
- Cyber café 14007
- Maintenance and repair of office, accounting and computing machinery 14008
- Computer training and educational institutes 14009
- Other computation related services n.e.c. 14010
youtube Adsense income & 44 AD
its; easy to file ITR for bloggers, enthusiasts. but there is confusion is it falls under business or profession.
while lawyers, doctors, CAs etc are traditional professionals.
A software company like (TCS, Wipro, doesn’t file ITR under Profession). because they are providing services as a product. while as a blogger /website owner as a manufacturing company
he has to outsource /create content (as the manufacturing product)
market the website (as Product)
Hosting fees, office setup rent, employees, Technical assistant, etc.
Finally, the income is a windfall once in many years and he will discontinue due to lack of market research (SEO things)
for webmaster best solution contacting a CA, he can assist you. you take care of your business.
GST on Income tax collected by Google. someone members have doubt should I file income tax for Adsense income.
unless you are residing outside of India. you have to file income tax if your income above current financial year income slab rates.
FROM IT department website
The presumptive taxation scheme of section 44AD can be adopted by the following persons :
1) Resident Individual
2) Resident Hindu Undivided Family
3) Resident Partnership Firm (not Limited Liability Partnership Firm)
In other words, the scheme cannot be adopted by a non-resident and by any person other than an individual, a HUF or a partnership firm (not Limited Liability Partnership Firm).
Further, this Scheme cannot be adopted by a person who has made any claim towards deductions under section 10A/10AA/10B/10BA or under sections 80HH to 80RRB in the relevant year.
The scheme of section 44AD is designed to give relief to small taxpayers engaged in any business, except the following businesses:
- The business of plying, hiring or leasing goods carriages referred to in sections 44AE.
- A person who is carrying on any agency business.
- A person who is earning income in the nature of commission or brokerage
- Any business whose total turnover or gross receipts exceeds two crore rupees.
- Apart from the above-discussed businesses, a person carrying on profession as referred to in
- is not eligible for presumptive taxation scheme under section 44AD
- section 44AA. (1) Every person carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or any other profession as is notified by the Board in the Official Gazette shall keep and maintain such books of account and other documents
if his income from business or profession exceeds one lakh twenty thousand rupees or his total sales, turnover or gross receipts, as the case may be, in business or profession exceed or exceeds ten lakh rupees in any one of the three years immediately preceding the previous year
my findings: section 44 AA (1) carrying the business on technical consultancy this caused defective returns (so a youtube/blogger/writer does not carry a technical consultancy). the government has to focus on Companies like Google, Flipkart registering in Singapore operating in India to evade taxes.
this may be solved by a court case IT department vs youtube/blogger and their judgment. or suitable business code for news websites (like media companies, ) or filing under normal provisions is the better option for a temporary basis.
Disclaimer: Information only for education may not accurate, I am not advising or any.