{"id":152,"date":"2020-09-19T12:42:09","date_gmt":"2020-09-19T07:12:09","guid":{"rendered":"https:\/\/total-sols.com\/blog\/?p=152"},"modified":"2020-09-19T12:42:11","modified_gmt":"2020-09-19T07:12:11","slug":"faqs-on-it-returns-filing-professionals","status":"publish","type":"post","link":"https:\/\/total-sols.com\/blog\/faqs-on-it-returns-filing-professionals\/","title":{"rendered":"FAQs on IT returns filing-professionals"},"content":{"rendered":"\n

Are\nyou a professional income tax assessee struggling to maintain your income tax\nfile ?  <\/strong><\/p>\n\n\n\n

Amendments to acts, pre-conditions, ill\nadvice and ignorance are the root of your problems. The income tax provisions\nof 44AD & 44ADA make it very easy for Professionals to file and maintain\ntheir income tax returns. Let us explore and understand more about it.<\/p>\n\n\n\n

One of our goals is to educate and empower\ntaxpayers with the right information. Today we explore the most commonly asked\nquestions a Professional Income Tax assessee has & provide the right\ninformation for them to act on it.<\/p>\n\n\n\n

Who is considered as a Professional Income Tax assessee according to the Income Tax department?<\/strong><\/p>\n\n\n\n

According to Sec 44ADA of the Income Tax Act,\nthe professionals covered are legal, medical, engineering or architectural,\naccountancy, technical consultancy, interior decoration, any new professions\nnotified by CBDT.<\/p>\n\n\n\n

Who\nare the professionals not covered under Section 44ADA?<\/strong><\/p>\n\n\n\n

The professionals with gross receipts exceeding 50 lakhs in a financial year are not covered under this presumptive tax.\u00a0 <\/p>\n\n\n\n

What is TDS and Is TDS deducted tax paid in full? <\/strong><\/p>\n\n\n\n

TDS stands for Tax Deducted at Source. When clients pay professionals their fee, clients are obligated to deduct tax if the payment exceeds Rs 30,000 in a financial year. For some professionals, this tax deduction may be 10% while for others it may be 5%. <\/p>\n\n\n\n

Coming to the second part, No, TDS is not income tax paid in full.\u00a0 It is only advance tax. Sometimes,\u00a0 additionally tax has to be paid & sometimes we can claim a refund. This will be based on taxable income, Loans, Investment, savings instruments, etc of the assessee.<\/p>\n\n\n\n

Where are the TDS\ndetails available? <\/strong><\/p>\n\n\n\n

All the TDS details are\navailable in a form called form 16A issued by your principal or client or\ncustomer.  If they have not issued you one, you can access the form 26AS\nfrom the TRACES portal, which shows the deducted details. <\/p>\n\n\n\n

How does one arrive at\nthe taxable income? <\/strong><\/p>\n\n\n\n

Taxable income is\narrived by adding your income from all sources and reducing it by rebate at\nexemptions available. <\/p>\n\n\n\n

The checklist for income\nsources are  <\/p>\n\n\n\n

  1. Income from Teaching \/ Consulting \/ Trading \/ Professional Income <\/li>
  2. Interest on fixed deposit.<\/li>
  3. Income from short-term capital gains like sale of Shares, Bonds,\u00a0 Mutual Funds, Debentures & Property. <\/li>
  4. Long-term capital gains from the sale of property.<\/li>
  5. Rental income and others. <\/li>
  6. Income from Foreign sources <\/li><\/ol>\n\n\n\n

    The net amount will be the taxable income upon which the tax is computed.\u00a0 If the balance is tax payable, you need to pay tax, otherwise claim a refund.\u00a0 One should bear in mind that payments received from foreign sources should also be included.<\/p>\n\n\n\n

    I am a professional who comes under Section 44ADA but my Gross Income is more than 50 Lakhs? Can I use Presumptive taxation?<\/strong>\u00a0<\/p>\n\n\n\n

    No, professionals whose income is more than 50 Lakhs can not use this scheme. But such professionals will benefit immensely by hiring a tax professional and getting audited books of accounts. This way, they can take maximum benefits of provisions in the law instead of paying Tax on their whole income.<\/p>\n\n\n\n

    Eg:\u00a0 A professional PQR has an income of Rs. 200 lakhs and TDS deducted is 20 lakhs.\u00a0 As per books of accounts, profit is Rs. 10 lakhs.\u00a0 Let us assume after rebates allowed, tax on income is 2 lakhs. The balance 18 lakhs of TDS can be claimed as a refund.\u00a0 Rs. 2 lakhs shall be adjusted towards tax payable.<\/p>\n\n\n\n

    How\ndoes section 44ADA benefit on tax as compared to regular computation?<\/strong><\/p>\n\n\n\n

    Let us make this clear with the help of an\nexample.  A medical professional XYZ has\ngross receipts of Rs. 48 lakhs.  Under\nsection 44ADA, XYZ will be paying tax only on 24 lakhs (50% of gross receipts)\npost rebate allowable under the Act. \nUnder regular computation, it would have been calculated on\nprofits.  So if his profit is 37 lakhs as\nper books of accounts, then he would have paid tax on 37 lakhs less rebate\nallowable instead of 24 lakhs.  So tax\npayable will be Rs. 13 lakhs less under Section 44 ADA.  <\/p>\n\n\n\n

    Is it mandatory for a professional to go with Section 44ADA if his gross receipts are below 50 lakhs?<\/strong><\/p>\n\n\n\n

    No, it is not mandatory.\u00a0 One can go with proper accounting.\u00a0 The taxable income can be lower as per books of accounts by opting for a tax audit.\u00a0 For eg, if the gross receipts of a professional are46 lakhs.\u00a0 Under Section 44ADA, the presumptive tax shall be payable on 23 lakhs less rebates allowable.\u00a0 If he is maintaining books of accounts and opting for audit, let us say the income post expenses and depreciation is Rs. 10 lakhs, he needs to pay tax on only Rs. 10 lakhs.\u00a0 The TDS deducted on the income after adjusting the tax payable can be claimed as a refund.\u00a0 <\/p>\n\n\n\n

    Let us recap. We have shared with you the most asked FAQs on Professional Income Tax Assessee. We have defined Professionals who come under Sec 44ADA. We have highlighted what limits are imposed on each of these professionals. We have now clarified TDS and Income Tax filing. So be a prudent taxpayer and pay your taxes on time.\u00a0 We have advised more than 2500 individuals over the last 25 years & helped them claim 50-80% tax refund by proper computation & declaration <\/p>\n","protected":false},"excerpt":{"rendered":"

    Are you a professional income tax assessee struggling to maintain your income tax file ?  Amendments to acts, pre-conditions, ill advice and ignorance are the root of your problems. The income tax provisions of 44AD & 44ADA make it very easy for Professionals to file and maintain their income tax returns. Let us explore and […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-152","post","type-post","status-publish","format-standard","hentry","category-accounts"],"_links":{"self":[{"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/posts\/152","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/comments?post=152"}],"version-history":[{"count":1,"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/posts\/152\/revisions"}],"predecessor-version":[{"id":153,"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/posts\/152\/revisions\/153"}],"wp:attachment":[{"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/media?parent=152"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/categories?post=152"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/total-sols.com\/blog\/wp-json\/wp\/v2\/tags?post=152"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}