NO, it will come under 44ADA
Presumptive Taxation under sections 44AD and 44ADA
I am a freelance website and software developer with approximately Rs. 12.5 lakhs yearly turnover. I have developed a small software and sell it through a company. 6% of my yearly turnover (i.e., Rs. 75,000) comes from domain name and web hosting renewal for clients. I don't have the infrastructure to provide the domain name and web hosting service. I purchase these services from other companies and resell them to clients for a very low-profit margin. If the domain name and web hosting are new terms for you, here is a short explanation. Domain name: A domain name is a unique and easily recognizable address on the internet (we type on the browser's address bar) that identifies a specific website—for example, www.google.com, www.taxfull.com, etc. Web hosting: Web hosting is the service of storing websites on servers and making them accessible on the internet. It involves allocating server resources and providing the infrastructure needed for websites to be viewed by users worldwide. A domain name serves as the unique address for a website, while web hosting provides the infrastructure and server resources necessary to store and make that website accessible on the internet. Now my questions: 1. Whether domain name and web hosting services come under section 44AD? 2. What will be the category (Nature of Business) for the domain name and web hosting services? Can it be 'Other computation related services n.e.c: 14010'? 3. Whether software development comes under section 44ADA? 4. Whether Website Development service comes under section 44ADA? 5. What will be the category (Nature of Business) for the Website Development service?
Asked 1 year ago in Income Tax
1. Yes it will fall under 44AD.
2. 21008 is the most safe option.
3. Are you a software engineer? Don't go by code you need to first confirm whether you are a software engineer or not and then we can decide on whether 44AD will be applicable or 44ADA.
4. No I don't think so.
5. 21008.
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Thank you.
1. Yes
2. "Other IT enabled services" (14005) seems to be more appropriate
3. Yes
4. No. 44AD
5. Point No.2
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Mr. Arora, As I understand it, for section 44AD, I need to choose a category (Nature of Business) that is eligible for section 44AD. But I see "Other IT enabled services" (14005) comes under Section 44ADA. So, what will be the category (Nature of Business) for my case (question number 2 and 5)?
Asked 1 year ago
For Code 14005, main sector is Computer and Related Services and sub-sector is Other IT enabled services. It does not come u/s 44ADA. 44ADA covers specified professions
- Yes both can be considered under section 44AD
- Both the services can be classified under"Other IT enabled services" (14005)
- Yes, it is covered by 44ADA
- No ,it will be considered under Section 44AD
- "Other IT enabled services" (14005)
Further regarding your query for point no 2 and 5 both do not come u/s 44ADA only specified professions are covered under section 44ADA.
Hello,
Hope you are doing well!!
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Yes, domain name and web hosting services come under Section 44AD.
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"Other IT enabled services" (14005) seems to be a more appropriate category for the nature of your domain name and web hosting services.
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Software development does come under Section 44ADA.
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Website development services do not come under Section 44ADA. Instead, they fall under Section 44AD, which is applicable to domain name and web hosting services.
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The category or nature of business for website development services would be "Other IT enabled services" (14005) as well.
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Thank you.
Shubham Goyal
The Information technology is a notified profession for the purpose of Section 44ADA. The services of domain name and web hosting services can fall under IT and therefore 44ADA should apply. Likewise for the software development and website development.
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