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Declare 50%. Skip the books.

Section 44ADA lets the specified professions declare 50% of receipts as profit — no bills or receipts needed. See the tax you'd actually pay, and exactly how much it saves you.

Your numbers

Information technology is on the list. Design, writing, marketing and general consulting are not — see the eligibility checklist below.

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software, rent, travel…
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The enhanced ₹75L limit needs cash receipts ≤5% — above that, the limit stays ₹50L.

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No lock-in for professionals. You can use Section 44ADA one year and keep books the next. Declaring less than 50% in a year means books of account for that year, and a tax audit if your total income is above the basic exemption limit. The five-year bar people quote is Section 44AD(4), which applies to the business scheme.

Regular

Actual expenses, your regime

Taxable income₹17,00,000
Slab tax₹1,40,000
Cess (4%)₹5,600
Total tax₹1,45,600
After TDS — payable₹1,45,600

44ADA

50% deemed profit, new regime

Taxable income₹10,00,000
Slab tax₹40,000
87A rebate− ₹40,000
Cess (4%)₹0
Total tax₹0
After TDS — payable₹0
Lowest tax

44ADA + New

50% deemed profit + new regime

Taxable income₹10,00,000
Slab tax₹40,000
87A rebate− ₹40,000
Cess (4%)₹0
Total tax₹0
After TDS — payable₹0
Tipping point: 44ADA beats regular filing only if your actual expenses are less than ₹10,00,000 (50% of gross). Your actual expenses are ₹3,00,000 (15.0% of gross) — so 44ADA is better for you — if 44ADA is open to your profession at all.

Eligibility checklist

  • ✓Gross receipts ₹20,00,000 ≤ ₹75L (enhanced limit, cash ≤5%)
  • !Design, writing, marketing and general consulting are not on the list of specified professions — whether 44ADA covers them is contested; confirm with a CA before relying on it
Important: Under 44ADA you cannot claim separate expense deductions — the 50% deemed profit already includes all expenses. If your actual expenses exceed 50% of gross, regular taxation saves more.
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Take it with you

Take the computation with you

Regular books against Section 44ADA on the same receipts, with the eligibility tests applied and the tipping point stated — the working your CA needs to sign off the election, in one page.

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Worked example

IT consultant earning ₹20L gross — 44ADA vs actual books, new regime

Regular books (actual expenses ₹3L): Taxable income = ₹20L − ₹3L = ₹17L. New-regime slab tax: 0-4L @0%, 4L-8L @5%=₹20K, 8L-12L @10%=₹40K, 12L-16L @15%=₹60K, 16L-17L @20%=₹20K → ₹1,40,000 slab. No 87A rebate (₹17L > ₹12L). Add 4% cess → total ≈ ₹1,45,600.

Section 44ADA (50% presumptive): Taxable income = ₹20L × 50% = ₹10L. Slab tax: 0-4L @0%, 4-8L @5%=₹20K, 8-10L @10%=₹20K → ₹40,000. 87A rebate: ₹10L < ₹12L, so full ₹40K is rebated. Total tax = ₹0.

44ADA saves ₹1,45,600 in this scenario, because actual expenses (₹3L) are far below the deemed 50% (₹10L). That is why most specified professionals within the ceiling — ₹50L, or ₹75L where at most 5% of receipts are in cash — use it.

Year by year: 44ADA has no lock-in. You can use it one year and keep books the next; the five-year bar in Section 44AD(4) applies to the business scheme, not to professionals. Use this tool to model each year before deciding.

Eligibility

Who can use Section 44ADA, and up to what

ConditionWhat it requires
Who you areResident in India, and an individual or a partnership firm that is not an LLP. Not a HUF, a company or an LLP.
What you doA profession named in Section 44AA(1) — legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration — or one the CBDT has notified: information technology, company secretary, authorised representative, film artist. Design, writing and marketing are not on the list; whether 44ADA covers them is contested.
Gross receipts — standardUp to ₹50,00,000 in the financial year.
Gross receipts — enhancedUp to ₹75,00,000, but only if at most 5% of your receipts are in cash (Finance Act 2023). Bank transfer, UPI, account-payee cheques and card count as non-cash; a cheque or draft that is not account-payee counts as cash. The higher ceiling is a condition, not the default.
What you declare50% of gross receipts as profit. You may declare more; you may not declare less without books and an audit.
Leaving itNo lock-in: a professional can use 44ADA one year and keep books the next. The five-year bar in Section 44AD(4) applies to the business scheme only.

Not the same thing

Section 44ADA vs Section 44AD

These get confused constantly, and filing under the wrong one is a real problem. 44ADA is the professionals' scheme; 44AD is the business scheme. If your work is one of the specified professions listed above, 44ADA is the scheme that applies; if it is not on the list, ask a CA which scheme fits.

Section 44ADASection 44AD
Who it is forSpecified professionalsBusinesses — trading, manufacturing, and non-specified services
Deemed profit50% of gross receipts8% of turnover, or 6% on non-cash receipts
Ceiling₹50L, or ₹75L with ≤5% cash receipts₹2Cr, or ₹3Cr with ≤5% cash receipts
Advance taxBoth pay 100% in a single instalment by 15 March, not in four (the proviso to Section 211(1); s.408(2) from FY 2026-27).
Typical ITRITR-4 (Sugam), where the other conditions for it are met.

How this works

Presumptive taxation, in plain terms.

Am I eligible for Section 44ADA?
Three tests, and all three must hold. (a) You are resident in India, and an individual or a partnership firm that is not an LLP — a HUF, a company or an LLP cannot use it. (b) You carry on a profession the law names or the CBDT has notified: legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, information technology, company secretary, authorised representative or film artist. (c) Your gross receipts are within ₹50L — or ₹75L where cash receipts are no more than 5% of the total (Finance Act 2023). Design, writing, marketing and general consulting are not on that list; whether 44ADA covers them is contested, so confirm with a CA before relying on it.
Is there a five-year lock-in under 44ADA?
No. The five-year bar people quote is Section 44AD(4), and it belongs to the business scheme — under the Income-tax Act 2025 it is s.58(7), which reaches businesses (Table Sl. No. 1), not professionals (Sl. No. 3). A professional can use 44ADA one year and keep books the next. What declaring less than 50% costs is that year: books of account, and a tax audit if your total income is above the basic exemption limit.
44ADA or 44AD — which one applies to me?
44ADA is for the specified professions (the list above) — 50% presumptive income. 44AD is for businesses — 8% presumptive income, or 6% on non-cash receipts, with a ₹2cr cap (₹3cr where cash receipts are within 5%). Unlike 44ADA, 44AD carries a five-year bar if you leave it (Section 44AD(4)). Work outside the specified list — design, writing, marketing — is where the two blur: some file it under 44AD, the position is contested, and it is a question for a CA.
Can I still claim 80C/80D deductions under 44ADA?
Yes, under the old regime. 80C, 80D, 80CCD(1B), and other Chapter VI-A deductions are independent of 44ADA — they apply to the presumed income just as they would to actual profit. Under the new regime, most Chapter VI-A deductions are not available (only standard deduction for salaried and employer NPS).
How is presumptive income calculated under Section 44ADA?
Taxable profit is deemed to be 50% of your gross professional receipts. You do not compute or prove actual expenses — the other 50% is treated as already spent. On ₹24L of receipts, taxable business income is ₹12L, and your slab rate then applies to that figure (after any Chapter VI-A deductions you are entitled to). You may declare more than 50%, but never less while staying inside 44ADA.
Do I need books of accounts or a tax audit under 44ADA?
No, that is the point of the scheme. While you declare at least 50% of gross receipts as profit and stay within the ceiling, you are relieved of the Section 44AA books requirement and of the Section 44AB audit. Both return for any year in which you declare less than 50% and your total income is above the basic exemption limit (Section 44ADA(4)).
How does advance tax work under 44ADA?
Presumptive filers get a carve-out under Section 211(1)(b) — s.408(2) of the Income-tax Act 2025 from FY 2026-27: instead of four instalments (15%, 45%, 75%, 100% by 15 June, 15 Sep, 15 Dec and 15 Mar), you pay 100% of your advance tax in a single instalment by 15 March. Miss that date and Section 234C interest (s.425 from FY 2026-27) applies to the shortfall, and 234B (s.424) can apply on top if you have paid less than 90% of the assessed tax for the year.
Which ITR form do I file under Section 44ADA?
ITR-4 (Sugam), which carries the presumptive schedule 44ADA is declared on — provided your total income is within ₹50L. You are pushed onto ITR-3 instead if your total income is above ₹50L, if you exceed the presumptive ceiling, if you choose to declare actual profit below 50%, or if ITR-4 is otherwise blocked — short-term capital gains or listed-equity LTCG above ₹1.25 lakh, being a company director, holding unlisted shares, foreign assets or income, or more than two house properties (AY 2026-27 rules; the ITR-4 for tax year 2026-27 has not been notified yet).
Which professions actually qualify as "specified professions"?
Legal, medical, engineering, architectural, accountancy, technical consultancy and interior decoration are named in Section 44AA(1). The CBDT has notified four more under it: authorised representative and film artist (1977), company secretary (1992) and information technology (2001). The Income-tax Act 2025 writes information technology and company secretary into the list itself (s.62(4)). Software development and IT consultancy therefore qualify as information technology. Professions outside the list — a designer, writer, marketer or coach — sit in a genuine grey area, and that is a question for a CA rather than a calculator.
I am salaried with consulting income on the side. Can I use 44ADA?
Yes, on the professional receipts only. Salary is taxed as salary and your consulting receipts are treated separately under 44ADA, provided the profession qualifies and the receipts stay within the ceiling. The two are added to arrive at total income, so the presumptive profit is what enters the slab computation, not the gross receipts.
What counts as "gross receipts" for the ceiling?
The total professional receipts credited to you for the year, before any expense. For marketplace work this is the gross figure the platform reports — not what landed in your bank after its commission — which is the single most common reason a 44ADA figure disagrees with Form 26AS. If you are GST-registered, GST collected is not your receipt and should not sit inside the number.
What happens if I cross the ceiling mid-year?
The ceiling is tested on the full financial year, not at the moment you cross it. If your year-end gross receipts exceed the applicable limit, 44ADA is unavailable for that year entirely — you compute actual profit, maintain books and file ITR-3, and the audit question under Section 44AB arises. It is worth watching the running total rather than discovering it at filing time.

Presumptive taxation for professionals is Section 44ADA of the Income-tax Act 1961 for FY 2025-26 and s.58(2) Table Sl. No. 3 of the Income-tax Act 2025 from FY 2026-27 (same 50% rate and limits; rates per Finance Act 2026). It applies to the specified professions (legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, information technology, company secretary, authorised representative, film artist) with gross receipts up to ₹50L — or up to ₹75L where no more than 5% of those receipts are in cash. Professions outside that list are a grey area. Consult a CA before relying on it.

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