#Taxation  #Tax-Planning  #Finance 

📋 Topics Covered

  • Introduction to Tax Planning (Salaried vs. Business)
  • Overview of Section 44ADA (Presumptive Taxation for Professionals)
  • Breakdown of Section 44AD (Presumptive Taxation for Businesses)

💡 Tax Planning

Below, we will explore tax planning specifically for Professions and Businesses.

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👨‍⚕️ Section 44ADA: Presumptive Scheme for Professionals

Besides generating annual gross receipts of less than Rs. 50 Lakhs, individuals who practice specific professions are eligible under this Section of the Income Tax Act (ITA).

Eligible Professions Under Section 44ADA

  • Accountants (CAs)
  • Medical Professionals (Doctors, Surgeons)
  • Legal Professionals (Lawyers, Advocates)
  • Technical Consultants & Engineers
  • Architects
  • Interior Decorators
  • Film Artists
  • Company Secretaries
  • Other professions notified by the Central Board of Direct Taxes (CBDT)

👥 Eligible Entities

Notably, the presumptive taxation regime under Section 44ADA applies only to resident Indian entities that are:

  • Individuals
  • Hindu Undivided Families (HUFs)
  • Partnership Firms (Note: Limited Liability Partnerships (LLPs) are not eligible for 44ADA).

🏢 Section 44AD: Presumptive Scheme for Businesses

The Presumptive Taxation Scheme is designed to give relief to small taxpayers by exempting them from the tedious job of maintaining complex books of account.

📌 Features of the 44AD Scheme:

  • Turnover Limit: Your total business turnover or gross receipts must be less than Rs. 2 Crores.
  • Net Income Declaration:
    • Minimum net income to be declared is 8% of your turnover.
    • This minimum net income drops to 6% for turnover processed via digital receipts (online methods).
  • No Accounting Records: You do not have to maintain detailed accounting records or books.
  • No Audit Required: You do not have to get your accounting records audited.
  • Advance Tax Payment: Assessees opting for presumptive taxation have to pay 100% advance tax by 15th March of that financial year. (Prior to FY 2016-17, you didn’t have to pay advance tax under this scheme).
  • Filing Returns: You can file your tax return seamlessly using the ITR-4 form, which is much shorter and simpler than the ITR-3 form.