Can director of financial company file tax under 44ada

Income Tax Income from Business or Profession
1

i am a director of mutual fund distribution private limited company and i am drawing 1.5 lakh pm as sitting fees…should i opt for presumptive income tax ,kindly guide.my company deduct tds also and what is the maximum amount should i withdraw withot GSTN

2

As a director drawing ₹1.5 lakh per month as sitting fees from your mutual fund distribution company, here are some points to consider regarding presumptive income tax and GST:

Presumptive Income Tax

  1. Presumptive Taxation Scheme : Under Section 44ADA of the Income Tax Act, you can opt for presumptive taxation if you’re engaged in a profession specified in Section 44AA(1) and if your gross receipts do not exceed ₹50 lakh in a financial year. In this case, you can declare 50% of your gross receipts as income, and you won’t have to maintain detailed books of accounts.
  2. Your Income : Since you are earning ₹1.5 lakh per month, your annual income would be ₹18 lakh (₹1.5 lakh × 12). This doesn’t exceeds the ₹50 lakh limit for presumptive taxation, so you will be eligible for this scheme.

TDS on Sitting Fees

  1. TDS Deduction : Your company is required to deduct TDS on the sitting fees paid to you. The TDS rate for professional fees is typically 10%, which means ₹15,000 is deducted every month, leading to an effective income of ₹1.35 lakh after TDS.

GST Implications

  1. Threshold Limit for GST : The threshold limit for registration under GST for service providers is ₹20 lakh (₹10 lakh for special category states). If your aggregate turnover exceeds this limit, you must obtain GST registration.
  2. Withdrawals Without GST : Since sitting fees are considered professional income, if you are below the ₹20 lakh threshold, you can withdraw amounts without needing to register for GST. However, since your annual income from sitting fees exceeds ₹20 lakh, you may need to consider GST registration if you provide other services that contribute to your aggregate turnover.

Summary

  • You can opt for presumptive taxation since your income doesn’t exceeds ₹50 lakh.
  • Your company will deduct TDS on your sitting fees.

You may need to register for GST since your income exceeds the threshold