Can salarised professional file income tax as consultant?

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Deal Subedar
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There is provision in income tax that professional like doctor, lawyer, engineer, CA etc. Can file ITR-4 for consultant charges.

My query is, is there any specific guideline/section of income tax which describes whom to consider consultant & whom to consider salarised person?

Can employer show salarised professional as consultant to save taxes for employe? Is it legal, if not what is penalty for it?

Can any CA here, guide on it…

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tax evasion is criminal offence in india.



Not a CA.

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Hey
I work in my office in capacity of a consultant
There is a section in Income Tax Act , 44ADA.

Section 44ADA offers a scheme of presumptive taxation of profits and gains arising from professions mentioned under Section 44AA(1) of the Income Tax Act, 1961. The benefit of section 44ADA can be taken only by those specified professionals whose annual gross receipts are under Rs 50 lakh.

So your Taxable income would be 50% of your receipt that too on presumptive basis and you do not have to maintain any books of account.

Plus after that you can also use Chapter VI deductions

PS : I normally charge for this advise
Pps: This is not tax evasion, this is just tax planning

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rahulkothu wrote:

Hey
I work in my office in capacity of a consultant
There is a section in Income Tax Act , 44ADA.

Section 44ADA offers a scheme of presumptive taxation of profits and gains arising from professions mentioned under Section 44AA(1) of the Income Tax Act, 1961. The benefit of section 44ADA can be taken only by those specified professionals whose annual gross receipts are under Rs 50 lakh.

So your Taxable income would be 50% of your receipt that too on presumptive basis and you do not have to maintain any books of account.

Plus after that you can also use Chapter VI deductions

PS : I normally charge for this advise
Pps: This is not tax evasion, this is just tax planning

Thanks. But my specific question is whether salarised professional can take benefit of it if employer is agree for it? (Particularly When professional is working as full time employee at employer’s organization?)

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drjpatwa wrote:

Thanks. But my specific question is whether salarised professional can take benefit of it if employer is agree for it? (Particularly When professional is working as full time employee at employer’s organization?)

Okay
Then yes work as a consultant, claim all expenses like petrol bill , depreciation etc and maintain a detail of such expenses.

And yes I am a salaried employee, but on paper I work as a consultant as I have made that arrangement with my company.

More details on 44ADA https://cleartax.in/s/section...da

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rahulkothu wrote:

Okay
Then yes work as a consultant, claim all expenses like petrol bill , depreciation etc and maintain a detail of such expenses.

And yes I am a salaried employee, but on paper I work as a consultant as I have made that arrangement with my company.

More details on 44ADA https://cleartax.in/s/section...da

Thanks

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