Presumtive Tax - Benefit under 44ADA

[Asked by Guest]

Sir/Madame,

Is a pensioner engaged by Government for consultancy show his income as 50% of the total received and claim TDS as deducted by the employer? That is, a person earning ₹ 4 lakh as consultancy fee (besides the pension) claim TDS as deducted by the employer. If not, what percentage is deductible towards telephone bills and applicable items?

Will you please clarify.

V. Nagarajan

Delhi

[DR.MARIAPPAN GOVINDARAJAN]

Your query is not clear.

[Nandan Khambete]

Hii,

You need to first ensure that your profession is covered under Section 44AA(1) before claiming benefit u/s 44ADA.

If you are eligible to claim u/s 44ADA, you can declare Net profit at 50% of Receipts. However, TDS deducted by client is not a expense and hence cannot be claimed.All exepnses like telephone ,etc are assumed to be claimed once your opt for 44ADA benefit.

You can claim set off of TDS Credits against tax payable on other taxable income

AI Summary

Presumptive taxation under section 44ADA: consultancy income can be declared as deemed profit; TDS isn't an allowable expense.
Eligibility for the presumptive scheme requires that the profession fall within the classes covered by Section 44AA(1). If eligible and the taxpayer opts for the presumptive regime under Section 44ADA, deemed net profit is accepted as a proportion of receipts and routine expenses are treated as assumed; TDS deducted by clients is not an expense but remains a tax credit that can be set off against tax on other income.