Presumptive Taxation 44ada- 50% of Gross or actual expense

[Shan S]

For professional Income,

50% of the Gross Income can be taken directly without calculating the expenses

or should show the actual expenses after calculating the total expenses by preparing P&L;

AI Summary

Presumptive taxation for professional income under section 44ADA and the treatment of gross receipts versus actual expenses. Presumptive taxation for professional income under section 44ADA permits fifty per cent of gross receipts or gross income to be adopted as deemed income without separately computing actual business expenses. The issue addressed is whether a professional taxpayer may directly take fifty per cent of gross income as taxable income, or whether actual expenses must first be worked out through preparation of a profit and loss account before determining income under the presumptive scheme.