Q1. Who can apply for section 44ADA?
Any self – employed professional like doctors, engineers, lawyers, accountants, technical consultants, etc.
Q2. I am salaried individual but I do some freelance work on the side? Can I claim 44ADA?
Yes. 44ADA can be claimed for business income. The total income would be salary income plus half the profession income.
Q3. Are deductions allowed?
Yes. The normal deductions like Investments in PF, LIC, etc. are all allowed. Only your professional expenses cannot be taken.
Q4. What if profit goes below 50% or gross receipts for the year exceeds Rs. 50 lakhs?
44ADA cannot be applied in this case. The taxpayer would have to maintain books and get them audited the year in which this happens.
Q5. Is depreciation allowed?
The 50% that 44ADA allows is assumed to include depreciation so depreciation cannot be allowed as an expense. But the value of asset shown is balance sheet can be shown after deducting depreciation.
Q6. Which ITR Form to be filed?
Taxpayer is required to file ITR-4 for income under Section 44ADA.