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Free tool · Presumptive tax

Declare 50%. Skip the books.

Section 44ADA lets freelancers 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

IT, design, writing and consulting are commonly claimed under the 'notified professions' clause — a gray zone; 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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5-year lock-in if you opt out. If you opt out of Section 44ADA in a later year (e.g. your actual expenses exceed 50% of gross), you cannot opt back in for 5 consecutive financial years (§ 44ADA(4)) — meaning full books and possibly a tax audit. Plan with care or consult a CA before opting in.

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.

Eligibility checklist

  • ✓Gross receipts ₹20,00,000 ≤ ₹75L (enhanced limit, cash ≤5%)
  • !IT / software / design / writing / consulting aren't on 44ADA's named list — most CAs treat them as notified professions, but it's a gray zone; confirm with a CA before opting in
  • ✓Not opted out of 44ADA in last 5 years (otherwise 5-year lock-in applies)
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 — even though actual expenses (₹3L) are less than the deemed 50% presumption (₹10L). This is why most freelancers below ₹75L opt in.

Important: If you opt out of 44ADA in any year after opting in, you cannot opt back for 5 years. Use this tool to model different income levels before deciding.

How this works

Presumptive taxation, in plain terms.

Am I eligible for Section 44ADA?
You must be: (a) an individual or HUF (not a company or LLP), (b) carrying on a "specified profession" — legal, medical, engineering, architectural, accountancy, technical consulting, interior decoration, or "other notified" (which includes IT/software, design, and writing as per recent ITR-4 schedules), and (c) gross receipts ≤ ₹75L for FY 2024-25 onwards (raised from ₹50L). Most freelance developers, designers, consultants, and writers qualify.
Why is the 5-year lock-in important?
If you opt out of 44ADA in a given year (e.g., your actual expenses are > 50% so you declare lower profit), you cannot opt back in for 5 years. You're locked into regular books-of-accounts for that entire period, which means tax audits if you cross the audit threshold. Plan with care — most opt-outs are accidental. The tool now surfaces this prominently as a red banner above your scenarios when gross receipts cross ₹15L — read it before opting in.
44ADA or 44AD — which one applies to me?
44ADA is for "specified professions" (the list above) — 50% presumptive income. 44AD is for general businesses — 8% (cash) or 6% (digital) presumptive income, ₹2cr cap (₹3cr if digital). Freelancers in the listed professions use 44ADA. Designers running a creative-services business (vs solo freelancing) may need 44AD instead — check with 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).

Section 44ADA applies to specified professionals (IT, legal, medical, engineering, accountancy, technical consultancy, interior design) with gross receipts ≤ ₹75L (FY 2026-27 limit). Consult a CA before opting in or out — there's a 5-year lock-in if you opt out.

Related guides

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Related glossary

Plain-English definitions of the terms behind this calculator.