Income tax on contract based employee and application of section 44AD

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  1. H Shrinath Bhat

    H Shrinath Bhat New Member

    As the remuneration received from the contract employee is the business income, can he/she file returns u/s 44AD ?
     
  2. ZED

    ZED Well-Known Member

    Tell us the nature of the income. Whether there is tax deduction therefrom?
     
  3. H Shrinath Bhat

    H Shrinath Bhat New Member

    Contract employee working as office assistant. No TDS made as payee is individual and not under audit requirement under 44AB.
     
  4. ZED

    ZED Well-Known Member

    In that case they are rendering professional services and hence it is not a business income and consequently benefit of S.44AD can not be availed. However the benefit of S.44ADA may be availed from next assessment year [17-18]
     
  5. H Shrinath Bhat

    H Shrinath Bhat New Member

    I am not clear, how the office assistants job (who makes printing, typing letters, ticket booking, making and serving coffee, tea, arranging documents for courier, receiving couriers, connecting people with telephone calls, arranging travel plans, helping to hire a taxi, arranging hotel booking etc) is covered under professional service. Is specified anywhere explicitly what is professional service.
     
  6. ZED

    ZED Well-Known Member

    Office assistant can do many kind of works for eg an assistant at a CA firm do tax audits, internal audit, compliance, representing clients to Income tax officer, Central Excise officer etc. The income of such an assistant will fall under profession. I have not been told the exact nature of the work.

    Further, in the very first post you were of the view that it is a business income i.e income under the head business or profession.
    Under this head we have the following categories

    [NOTE:THIS LIST DOES NOT NECESSARILY DETERMINE THE EXACT NATURE OF THE INCOME. For eg a commission agent can also be covered in profession (depending upon the facts of the case).
    1. Manufacturing Industry
    2. Trading
    3. Commission agents
    4. Builder
    5. Contractors
    6. Builders
    7. Professionals
    8. Others

    I consider it as 2 main categories i.e Professionals and other than professionals (aka business)

    The assistant in your case can not be treated as an assessee having income from business. S.44AD should not be applicable. In my personal opinion it should be covered under "Income from other sources" if the same is not covered under the head "Income from salaries."

    [Please provide us with more info when asking a query, the answer will change as the facts are changed.]
     
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