Reiumbursement of Expenses by Client during the course of work

[Shan S]

Client reiumburses expenses made for internet, software. Should that be included in gross income for 44ADA?

 

[Sadanand Bulbule]

Yes. All receipts from clients including expense reimbursements are part of aggregate gross receipts for the purpose of Section 44ADA of the Income Tax Act, 1961. And the upper limit of such aggregate gross receipts has been increased to Rs. 75,00, 000/-  wef 01/04/2024.

AI Summary

Expense Reimbursements Count as Gross Receipts Under Section 44ADA; Threshold Raised to Rs. 75 Lakh from April 2024 Reimbursements received from clients for expenses such as internet and software must be included in the aggregate gross receipts under Section 44ADA of the Income Tax Act, 1961. This means that all receipts, including expense reimbursements, count towards the gross income for the purpose of this section. Additionally, the threshold for aggregate gross receipts under Section 44ADA has been increased to Rs. 75,00,000 effective from April 1, 2024.