Can a Partnership Firm (With Turnover LESS THAN 20LAC since inception) OPT FOR PRESUMPTIVE TAXATION U/S 44AD IN AY 22-23 if It DID NOT OPT for PRESUMPTIVE TAXATION u/s 44AD in ANY of the previous 10 years (From 2011 to 2021). Only ITR5 was being used all these years and ITR 3 for Partners (only 2).
If ITR 4 Sugam is used for the Partnership Firm which ITR form should be used for both the partners. One of the partner has income from other source and another partner has Salary Income + Income from other source other than remuneration and interest from partnership.
NB: All these years the profit was shown between 6%-8% of Turnover after deducting all expenses (all digital transactions).
Yes, a partnership firm with a turnover of less than 20 lakhs can opt for presumptive taxation under section 44AD, even if it did not opt for it in any of the previous 10 years.
As per the stated information, the partners should file their respective income tax returns under Form ITR 3.
First of all thanks for giving quick answers to my other query.
If I earn 10 lakh as a professional and 4 lakh from partnership firm in the form of salary/remuneration then can I add 4 lakh income to my professional income and pay 50% tax i.e., 7 lakh tax?
Does the income earned from partnership firm will be my business income or I have to put it as salary under ITR form?
Can I buy car on partner name from partnership firm bank account and will I get depreciation on it?
VVI
Suppose partnership gross turnover is 16 lakh
Under 44ada the income would be 8 lakh.
Can remuneration/salary will be deducted from 8 lakh?
Can interest paid to partners deductible from 8 lakh?
As per your stated information, your professional income of ā¹10 lakhs will be taxed according to the applicable provisions for professionals, and the income of ā¹4 lakhs from the partnership firm will be taxed separately under the provisions for partnership income. Both incomes will be subject to tax at the respective tax rates applicable to each category.
So, the income earned from the partnership firm will be considered your business income.
If the car is used for the business purposes of the partnership firm, then yes, can claim depreciation on it.
Yes, the remuneration/salary paid to partners is deductible from the presumptive income.
Yes, interest paid to the partners is deductible from the presumptive income calculated under Section 44ADA.
Where I should exactly add my 4 lakh income? Under 44ad or 44ada?
4 and 5.
You said partners remuneration/salary is deductible from net income even if partnership firm files under 44ad or 44ada. But here are some contradictory articles. So can you check and reverify.
Also please reconfirm with your colleagues. Thanks
An income of ā¹4 lakhs would be classified as regular business income and does not fall under either section 44AD or section 44ADA.
According to section 44ADA, only deductions mentioned in sections 30 to 38 are deemed to be allowed (already considered). However, this particular deduction of remuneration paid to partners comes under section 40(b), which can be additionally claimed.
Madam this year i have salary, insurance, minor loss on intradayā¦ umi have choosen presumptive taxation. Now from 23-24 i have stopped trading can i opr for new tax regime. And avail standard deduction of 50000
Yes, as per your stated information, from FY 2023-23 and AY 2023-24 if you do not have trading income, then you can opt out of the presumptive taxation scheme. And irrespective of regular or presumptive scheme you can opt for New Tax Regime but you do not have the option to claim the standard deduction of ā¹50,000 against your salary income.
From the next filing season AY 2024-25 you will be able to claim a standard deduction under the new tax regime.
Hi,
I am a salaried person having salary of 54Lacs and paying a huge tax. Can i change my employment status in the same organization from an employee to consultant engineer/contract employee/professional and avail the Section 44ADA benefits? If yes, can i still get the payment on a monthly basis from my employer on a fixed day just like a permanent employee or i need to issue any invoice to my employer on a monthly basis for the services that i am offering them ?
Would there be any issue in case if i change job and become a permanent employee with any other or same company?
An Individual, a HUF, or a partnership firm(except LLP) can opt for the presumptive taxation scheme u/s 44AD. Hence, no, an OPC cannot opt for presumptive taxation.
Hi @Surbhi_Pal ,
I know that for an individual, presumptive taxation is applicable. Since, OPC is owned by an individual, why canāt it applicable to OPC?