Eligible Business under section 44AD
The presumptive taxation scheme of section 44AD of income tax Act 1961 can be adopted by following persons:
- Resident Individual
- Resident Hindu Undivided Family (HUF)
- Resident Partnership Firm (not LLP (Limited Liability Partnership Firm)
Section 44ADA of Income Tax Act for AY 2018-19 {Section 44AD in Hindi}
In other words, the scheme cannot be adopted by a non-resident and by any person other than an individual, a Hindu Undivided Family or a partnership firm (not LLP Firm).
Further, this presumptive taxation scheme cannot be adopted by a person who has made any claim towards deductions under section 10A/10AA/10B/10BA of income tax act or under sections 80HH to 80RRB of income tax act in the relevant year.
Not Eligible Business under section 44AD
The scheme of section 44AD of Income tax is designed to give relief to small taxpayers engaged in any business, except the following businesses:
- Business of plying, hiring or leasing goods carriages referred to in sections 44AE of income tax act.
- A person/ service provider who is carrying on any agency business.
- A person/service provider who is earning income in the nature of commission or brokerage
- Any business whose total turnover or gross receipts exceeds 2 crore rupees.
[Section 44AE of Income Tax Act] Section 44AD of Income Tax Act Bare Act – Section 44AD For AY 2018-19
Apart from above discussed businesses, a person/service provider carrying on profession as referred to in section 44AA(1) of income tax act is not eligible for presumptive taxation scheme under section 44AD of income tax act.
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