Chartered Accountant

Opinion:

There are number of transactions wherein quoting of Permanent Account Number (PAN) is mandatory as it enables income tax department to keep a proper track of numerous transactions.  Rule 114B of the Income Tax Rules-1962 specified the following transactions wherein quoting of PAN is mandatory:

1. Obtaining PAN is mandatory only in the cases mentioned above. If any person is selling goods, then PAN would be mandatory if the sale amount per transactions exceeds Rs. 2 Lakh & not Rs. 50,000/- as mentioned in the query.
2. There is no restriction on acceptance of Cash exceeding Rs. 50,000/- (but less than Rs. 2 Lakh) in cash. From 01.04.2017, acceptance of an amount of Rs. 2 Lakh or more is prohibited u/s 269ST in the following situations:
   (a) in aggregate from a person in a day; or
   (b) in respect of a single transaction; or
   (c) in respect of transactions relating to one event or occasion from a person.
3. The restriction even applies even in respect of sale done before 01.04.2017 i.e., Rs. 2 Lakh or more cannot be accepted against credit sale done prior to 01.04.2017.
4. Tax Collection at Source (TCS) was required prior to 01.04.2017 in respect of cash sale exceeding Rs. 2 Lakh. No such TCS is required from 01.04.2017. Further, the requirement to quote PAN is there in respect of all if the sale/ service amount per transactions exceeds Rs. 2 Lakh.

1. To simplify the taxation scheme, to reduce the compliance burden & to facilitate the ease of doing business for the small taxpayers, a concept of presumptive taxation is extended to professionals also by introducing section 44ADA in the Income Tax Act-1961. As a result, any resident Indian having income from profession (legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, authorized representative, film artist, company secretary, information technology and such other profession as notified by CBDT) with gross receipt from such profession not exceeding Rs. 50 lakhs have an option to declare 50% or more of the gross receipts as income from such profession. If minimum 50% of the receipts is offered as income then no books of accounts is required to be maintained. However, if such person claims income to be lower than 50% of the gross receipts from such profession & further if total income exceeds the maximum amount not chargeable to income-tax, then the person has to maintain the required/specified books of account, documents and get them audited from the CA.
2. In your case, you have rendered consultancy services for financial literacy to the bank against Rs. 2 Lakh is received as fee. Question is, whether it is covered by presumptive taxation u/s 44ADA? If yes, you can offer 50% minimum as income u/s 44ADA & if not, then deduction would be admissible on actual basis & not on ad-hoc basis.
3. Every time a new section is inserted it gives rise to new thoughts, interpretations, queries and anomalies and the same is the case with newly introduced section 44ADA. For the purpose of section 44ADA, profession is intended to cover only legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, authorized representative, film artist, company secretary, information technology & such other profession as may notified by CBDT. Professional services by way of consultancy of financial literacy doesn’t appear to be falling within the four corners of section 44ADA & in my personal opinion, you cannot opt for presumptive taxation by offering income @ 50% on presumptive basis. You can get the actual expenses incurred for earning the income as deduction.