Section 44ADA: Profits and Gains of Profession on presumptive basis


Tired of doing your own books?

The benefit of presumptive taxation scheme was earlier given to Businesses, which has now extended to Professionals also. Thus, Professionals whose Gross Receipts are not more than Rs. 50 Lakhs in a financial year, can enjoy the benefit of presumptive taxation u/s 44ADA from FY 2016-17.

  • The scheme shall be applicable to individuals, HUF’s and partnership firms excluding Limited Liability Partnership Firms.
  • The Persons engaged in the below mentioned profession can opt for this presumptive taxation scheme u/s 44ADA and net income of such person would be assumed to be 50% of the gross receipts for the relevant financial year:
    1. Legal
    2. Engineering
    3. Medical
    4. Architectural Profession
    5. Accountancy Profession
    6. Technical Consultancy
    7. Interior Decoration
    8. Authorized representatives
    9. Film Artists
    10. Certain Sports related person
    11. Company Secretaries
    12. Information Technology
  • An assessee who opts for this presumptive scheme, shall be exempted from maintenance of books of accounts.
  • The assessee cannot deduct any business expenses against the income under presumptive taxation scheme.
  • However, an assessee would be required to prepare books of accounts u/s 44AA and get his accounts audited, in case the assesse claims that profits and gains are less than 50% of gross receipts.
  • Unlike as in Section 44AD for businesses, a professional can opt in and out of the scheme at anytime without the 5years restriction.
  • ITR 4 would be applicable under this.

Let's get in touch

Get in touch with us to understand our services a little more. Consultation is free, your time is not