whether coaching centers come under business or it is profession? and will sec 44AD applicable for coaching centers
Coaching Centers will cover under business and accordingly section 44 AD gets applicable for coaching centers if the following conditions are complied with : 1. Coaching center is carried on by Resident individual / Resident Partnership Firm (not Limited Liability Partnership Firm). 2.Gross receipt from coaching centers does not exceed Rs 1 crore. 3. Taxable business income from coaching centre shall be 8% of the gross receipt. 4. Taxable business income from coaching centre can be declared as less than 8% however, if he does so, and hisincome exceeds the maximum amount which is not chargeable to tax, then he is required to maintain the books of account as per the provisions of section 44AA and has to get his accounts audited as per section 44AB. 5. A person opting for the presumptive taxation scheme of section 44AD will not be liable to pay advance tax in respect of income from business covered under section 44AD.
Dear, yes, running of Coaching center is also covered in the definition of business & profession. accordingly section 44AD is also applicable on coaching center. however section 44ad is applicable only when your fees collection during the year is less than or equal to 1 crore. any other query feel free to contact us Writer CA Chitranjan Agarwal