GST & Tax
44ADA & 44AD Presumptive Tax Calculator
Tax on 50% of professional receipts or 6–8% of business turnover under section 58, with limits and advance tax.
Rates last verified 2026-09-24 — always confirm against the current notification before filing.
Enter receipts for the whole year, excluding GST. Indian clients usually deduct 10% TDS on professional fees. New tax regime.
Under the presumptive scheme, the whole amount is one instalment. To check interest if you miss 15 March, use the Advance Tax Calculator.
How presumptive tax works
Under the presumptive scheme, you don't work out your actual profit. The law assumes a fixed share of your receipts is profit, and you pay tax on that, with no need for books of account or an audit. From 1 April 2026, the scheme is section 58 of the Income-tax Act, 2025, which merged the old sections 44AD and 44ADA with the same rates and limits.
Professionals (old 44ADA), such as doctors, lawyers, chartered accountants, architects, engineers, interior designers, technical consultants and IT professionals, are taxed on 50% of their gross receipts. The limit is ₹50 lakh of receipts a year, or ₹75 lakh if no more than 5% of them came in cash.
Businesses (old 44AD), such as traders, shops and small manufacturers, are taxed on 6% of turnover received by bank transfer, UPI, card or cheque, and 8% of turnover received in cash. The limit is ₹2 crore of turnover, or ₹3 crore if no more than 5% came in cash. The scheme isn't open to LLPs, companies, or commission and brokerage businesses.
Either way, receipts don't include GST, and you can declare a higher profit if your real profit is higher. You can't claim expenses or depreciation on top. The whole year's tax is due as one advance tax payment by 15 March, and you file ITR-4 if your total income is up to ₹50 lakh. The Advance Tax Calculator shows the interest if you miss that date.
Worked examples
A freelance developer with ₹30,00,000 from foreign clients, all paid into a bank account. Presumptive profit is 50%, or ₹15,00,000. Under the new regime, tax is ₹20,000 + ₹40,000 + ₹45,000 = ₹1,05,000, plus 4% cess, for ₹1,09,200. Foreign clients don't deduct TDS, so the full ₹1,09,200 is due as advance tax by 15 March 2027. That's about 3.6% of receipts.
The same developer with Indian clients who deduct 10% TDS under section 194J would have ₹3,00,000 deducted during the year. That's more than the ₹1,09,200 of tax, so there's no advance tax to pay, and ₹1,90,800 comes back as a refund after filing.
A trader with ₹2.5 crore of turnover, ₹2.4 crore of it by bank and UPI and ₹10 lakh in cash. Cash is 4% of turnover, so the ₹3 crore limit applies. Presumptive profit is 6% of ₹2.4 crore plus 8% of ₹10 lakh, or ₹15,20,000, and the tax comes to ₹1,12,320.
Frequently asked questions
Is 44ADA still valid after the new Income-tax Act?
Yes. From 1 April 2026, 44AD, 44ADA and 44AE are combined into section 58 of the Income-tax Act, 2025. The rates and limits are unchanged: 50% of receipts for professionals up to ₹50 lakh (₹75 lakh with 5% or less in cash), and 6% or 8% of turnover for businesses up to ₹2 crore (₹3 crore with 5% or less in cash).
Can software developers and freelancers use 44ADA?
Most can. Information technology is a notified profession, so software developers and IT consultants qualify, as do designers working in interior decoration, engineers, and technical consultants. Freelancers whose work isn't a specified profession, such as some content writers or marketers, may need the business scheme (44AD) instead, where only 6–8% of receipts is treated as profit. Check with a CA if your work is borderline.
Can I show less than 50% profit under 44ADA?
Not while staying in the scheme. If your actual profit is lower and your income is above the basic exemption limit, you have to keep books of account, get a tax audit and pay tax on the actual profit. Declaring more than 50% is always allowed.
Is GST included in receipts for 44ADA and 44AD?
No. GST you collect belongs to the government, so leave it out of receipts or turnover. GST registration is a separate test: service providers generally need to register once receipts cross ₹20 lakh a year, and supplies to foreign clients can be exported without paying GST under a Letter of Undertaking (LUT).
When do I pay tax under the presumptive scheme?
The whole year's advance tax is due in one instalment by 15 March, instead of the usual four. If your tax after TDS is under ₹10,000, you don't need to pay advance tax and can pay the balance as self-assessment tax before filing your return.
Is there a lock-in if I opt out?
For businesses (old 44AD), yes: if you opt in and then declare profit below the presumptive rate in any of the next five years, you can't use the scheme again for the five years after that. There's no such lock-in for professionals under the old 44ADA.