Earlier the presumptive taxation scheme was restricted only to businesses and the professional was not even considered for this scheme. But, now professionals are also provided a new section that is section 44ADA for presumptive taxation.
Presumptive scheme is applicable to whom?
Any Resident Individual, HUF, partnership firm, that has professional income can be considered under this scheme. Total gross receipts for a Financial year must be less than Rs. 50 lakhs.
Which professionals can benefit from this scheme?
All the professions who are considered under section 44AA of Income-tax Act are considered here as well. These professions include legal, medical, engineering, architectural, accounting, technical consultancy or interior decoration as well as other notified professions.
Professionals like of film artists such as directors, actors, cameramen, editors, singers, lyricists, writers etc, are considered as Notified Professionals.
What are the conclusions that can be drawn from the audit of books of accounts?
When a taxpayer claims a profit of at least 50% of total gross receipts, then he/she is not required to maintain books of accounts. But, the tax audit under Income Tax Act, 1961 is applicable to taxpayer in following cases-
- When the taxpayer wants to show profit of less than 50% of gross receipts.
- If his/her taxable income is more than basic exemption limit.
In the above-mentioned cases, books of accounts must be audited by a Chartered Accountant.
What are the positive outcomes of Presumptive scheme?
Earlier, Professionals where required to maintain books of accounts, for every financial year and in cases where the gross receipts were more than Rs.25lakhs, they were supposed to get the books of account audited by a Chartered Accountant, but now they are free from the hassle of maintaining books of accounts.
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