Presumptive scheme beneath the income tax is a popular policy which is been used by businesses and professionals. The same scheme diminishes the load of the income tax provisions on micro and small businesses and professionals. The presumptive tax scheme for the mentioned professionals was made in 2016.
The presumptive taxation scheme permits the assessee to assume their income according to the specific per cent of their gross receipts or revenue in which we would talk in detail about the presumptive tax scheme available to the professionals and which the class of the professionals would claim the policy.
Income Tax Presumptive Scheme Under Section 44ADA for Professionals
Under section 44DA the mentioned professionals pose the option to choose the scheme to compute their taxable income. Beneath the scheme then the assessee would offer 50% of their gross professional receipts as taxable profits. But the individual would show a higher income than 50%. But the assessee avails the profits to be reduced than 50% in that concern he or she would be needed to maintain the books of accounts and get a tax audit finished.
The individual who chooses the presumptive taxation scheme is deemed to avail of all the deduction of expenses. Any additional claim of the deduction would not be permitted the post to declare the profit at the rate of 50%.
Who Would Claim the Presumptive Scheme?
Any resident person of a partnership firm who is involved in the mentioned professions would claim the scheme. The policy is not available to the nonresidents, LLPs and HUFs.
The policy would be chosen by the mentioned professionals who have gross receipts of up to Rs 50 lakhs in the fiscal year.
What Do Mentioned Professions Comprise?
Sec 44ADA mentioned below the professions which are subjected to claiming the presumptive tax scheme:
- 1) Legal
- 2) Medical
- 3) Engineering or architectural
- 4) Accountancy
- 5) Technical consultancy
- 6) Interior decoration
- 7) Any other profession as mentioned via CBDT
Do IT Professionals Claim Presumptive Tax Scheme Under Section 44ADA?
Yes, IT professionals would claim the presumptive tax scheme under section 44ADA CBDT allows the extension of time, mentioned professionals who would claim the advantage of the presumptive policy. Mentioned were reported:
- a) The profession of an authorized representative
- b) the profession of the film artists (actor, cameraman, director, music director, art director, dance director, editor, singer, lyricist, story writer, screenplay writer, dialogue writer, and dress designer)
- c) the Profession of Company Secretary
- d) the Profession of Information Technology
Why Does this Tax Scheme Advantageous to Professionals Who Choose the Same?
Excluding permitting to presume the taxable income at 50% of gross receipts/revenue.
- Does away from the maintenance of the books of accounts.
- The individual who chooses the scheme can furnish the advance tax on or prior to 15th March of the fiscal year.
- There is no limitation on choosing the scheme other than 5 years limitations on the businesses choosing for the income tax presumptive scheme under section 44AD.
What Does One Have to Do for Calculating & Filing ITR Under Presumptive Tax Scheme?
For calculating the taxable income and furnishing the income tax return beneath the presumptive tax scheme, one is required to comply with the law of sec 44ADA and calculate their gross receipts and income with a 50% rate and notify that during furnishing the income tax return.
However, the presumptive policy prevents the preparation of the books of accounts that a person should record to explain the computation of the total receipts and to do compliance with the additional acts like GST, executing that would make the GST returns filing precise.
