Question And Answer | |
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Subject: | 44AD business applicability |
Category: | Income-Tax |
Querist: | Ashish Kumar |
Answered by: | Law Intern |
Tags: | Section 44AD |
Date: | July 24, 2025 |
Individual is engaged in Management consultancy and has opted for 44AD. Can a individual opt for 44AD rendering business consultancy and if yes or no, give a case law or notification which specifies the same.
If the individual providing the consultancy is not professionally qualified (like a CA), he is eligible to offer the presumptive income u/s 44AD.
In Vishnu Dattatraya Ponkshe vs. Central Processing Centre [ITA No. 1570/Mum/2023], the assessee, with only a 10th-standard education, earned income from a consultancy business related to stamp duty and registration and declared it under Section 44AD at 8% of receipts. The AO applied Section 44ADA, adding 50% of the income as taxable, assuming it was a professional service. The ITAT ruled that since the assessee lacked qualifications for professions listed under Section 44AA(1) (e.g., legal, medical, engineering, or technical consultancy), the consultancy was a business activity, not a profession. Thus, Section 44AD was applicable.