Help me pick currect business/profession code based on activity to avoid notice for non compliant code

Income Tax Act 1961 Income from Business or Profession
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1

I need the correct and most suitable codes for Section 44AD and Section 44ADA for a small business.

1. Section 44AD Selling off-the-shelf (non-customized) software licenses via website (B2C).

2. Section 44ADA Providing software consultancy services.

I need the most accurate and appropriate codes for both categories so that I do not receive any notice from the Income Tax Department for using an incorrect or non-compliant business/profession code.

2

Hello @Mr.D,

Welcome to the community!

For Section 44AD, there isn’t a very specific code only for selling software licenses online. You can use 09028 – Retail sale via internet / e-commerce (commonly used for online product sales). Another option could be 21008 – Other services, if your activity doesn’t fit perfectly into a specific category.

For Section 44ADA, software consultancy generally falls under 16005 – Engineering and technical consultancy.

Hope this helps!

3

The answer covers the details of the question. It will be clearer about the requirements of the question

4

Choose the business or profession code that most accurately matches your primary source of income and business activity. The Income Tax Department uses these codes to classify income and apply the correct tax rules. Using an incorrect code may lead to processing delays, mismatches, or additional scrutiny. If your activity falls under a specific profession such as architecture, interior decoration, software development, or consultancy, select the corresponding profession code. If multiple activities are involved, choose the code related to the activity generating the highest revenue. When in doubt, refer to the latest CBDT code list or seek professional tax advice.

5
  1. Which country/jurisdiction? (For example: India GST registration, Udyam/MSME, company incorporation, income tax, UAE, UK, etc.)
  2. What is the exact business activity? Describe what you do in plain language.
  3. How do you earn revenue? (Selling products, consulting, software development, affiliate commissions, training, digital marketing, SaaS subscriptions, freelancing, etc.)
  4. Business structure (sole proprietorship, partnership, LLP, private limited company, etc.)
  5. If this is for India, tell me whether you need:

    • NIC 2008 code (Udyam/MSME)

    • GST business/activity code

    • MCA company object classification

    • Professional tax registration

    • Something else