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ITR Filing: How Persons With Business Or Professional Income Can File ITR?


As we all know ITR filing date has approached near by to its last date 31.7.2018 for the previous financial year ended on 31.3.2018 that is for Ass Yr 18-19.

How Persons With Business Or Professional Income Can File ITR?

There are simple ways of filing ITR for businessman and professionals under the presumptive taxation scheme of the government of India

Businesses with Turnover less than Rs. 2 crore

Businessman whose turnover is less than Rs 2 Crore can opt for declaring their business profits U/s 44AD @ 8%( for cash receipts) or 6%(for Digital receipts of turnover)

Businesses eligible for presumptive tax benefit scheme

Wholesale and retail trade by the business persons are subject to the benefits of Section 44AD. This said manufacturers cannot avail of the benefits under the scheme.

The benefits are the assessees are not required to maintain the books of records as prescribed by the Income tax rules.

Illustration for a Business person say Kirana Merchant

Cash Sales 1 crore
Digital Sales (say Paytm) 0.5 Crore
Net Profit @8 % 8 Lakhs
Net Profit @ 6 % 3 Lakhs
Total business Profit 11 Lakhs

However a point to be kept in mind is that the turnover receipts should be in matching with the GST returns and VAT returns for 9 months and 3 months, respectively as GST came into effect from July1, 2017.

How professionals should calculate their tax on Presumptive basis?

Professionals have also advantage to get their ITR filed before due date on presumptive basis u/s 44ADA.

Professionals covered under this scheme are doctors, chartered accountants, interior designers, lawyers etc

Professionals not covered are artisians, news reporters etc.

How professional can take advantage?

If the gross receipts from the profession are below Rs 50 Lakhs, the individual may opt for sec 44ADA ( presumptive tax scheme) by declaring 50% of its profession gross receipt as net profit without claiming any expenses therefrom. And for the same the assesse is not required to maintain the prescribed books of account as under sec 44aa


Example for a doctor professional

Gross receipts Rs 45 Lakhs

Expenses Rs 12 Lakhs

Net Profit U/s 44ADA 50 % of gross receipts 22.5 Lakhs ignoring the expenses above

Read more about: itr filing itr
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