ZenIT || Changes in 44ADA Feeding As per Budget 2023

Whats New: Budget 2023 increased the threshold under section 44ADA to Rs 75 lakhs from Rs 50 lakhs, provided the cash Turnover are less than 5%.

Eligible persons who can take advantage of the presumptive taxation scheme ofsection 44ADA:

A person resident in India engaged in following professions can take advantage of presumptive taxation scheme of section 44ADA:-

1) Legal.

2) Medical.

3) Engineering or architectural.

4) Accountancy.

5) Technical consultancy.

6) Interior decoration.

7) Any other profession as notified by CBDT.

The Finance Act, 2021 has amended provisions of section 44ADA to define eligible assessee. W.e.f. Assessment Year 2021-22, the benefit of section 44ADA is eligible only in case of assessee who is an:

a) Individual, and

b) Partnership firm other than a Limited Liability Partnership as defined under clause (n) of sub-section (1) of section 2 of Limited Liability Partnership Act, 2008.

Process to Data feeding in Software:

Step 1:

Go To Transaction >>Business and profession Income:

Step 2 and 3:

Select the Presumptive >> 44ADA >> then Click on Add:

Step 4:

Now, put the data entry in the respective columns:

Note:

For Banking Channel contains --> Through a/c payee cheque or a/c payee bank draft or bank electronic clearing system received or prescribed electronic modes received before specified date.

For Cash Receipts contains --> Receipt in cash.

Turnover Other mode --> other than Banking Channel and Cash receipts.

C = To avail the benefit of a 75 Lakh turnover, as per the budget changes, Receipt (Cash) should not exceed 5% of the total turnover.

For Example :

            A = Receipt (Banking Mode) :- 40,00,000

            B = Receipt (Other Mode) :- 30,00,000

            Total Receipt (Other + Banking Mode)  = 70,00,000

            So, the Cash Receipt (should not be more than 5%): 70,00,000 * 5% = 3,50,000.

Note: The total gross turnover should not be more than 75 Lakh.

Hope This Helps.

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