Question And Answer
Subject: 44AD business applicability
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Querist: Ashish Kumar
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Date: July 24, 2025
Query asked by Ashish Kumar

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.

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Answer given by

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.



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