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Presumptive Tax Calculator — 44ADA & 44AD
Tax for freelancers, professionals and small businesses declaring income as a fixed share of receipts.
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Presumptive taxation trades precision for simplicity. You declare a fixed percentage of receipts as income, pay tax on that, and are excused from maintaining books or defending an expense schedule.
Which section applies
Section 44ADA covers specified professionals — doctors, lawyers, architects, engineers, accountants, technical consultants, interior designers — at 50% of gross receipts. Section 44AD covers most small businesses at 8% of turnover, or 6% on receipts banked rather than taken in cash.
The ceilings
₹75 lakh for 44ADA and ₹3 crore for 44AD, but only when cash receipts stay within 5% of turnover. Otherwise the older limits of ₹50 lakh and ₹2 crore apply. Cross the ceiling and you are back to books and audit.
The lock-in
Opting out of 44AD after using it bars you from it for the next five assessment years, and brings audit requirements with it. 44ADA has no such lock-in. Advance tax under both is due in a single instalment by 15 March.
Frequently asked questions
Who can use section 44ADA?
Specified professionals — doctors, lawyers, engineers, architects, accountants, technical consultants, interior designers and film artists — with gross receipts up to ₹75 lakh, provided cash receipts stay within 5% of the total. Otherwise the limit is ₹50 lakh.
What is the difference between 44AD and 44ADA?
44ADA is for professionals and declares 50% of receipts as income. 44AD is for most other small businesses and declares 8% of turnover, or 6% where receipts are banked rather than taken in cash. The turnover ceiling for 44AD is ₹3 crore on the same cash condition.
Can I declare more than the presumptive rate?
Yes, and you should if your actual profit is higher — the percentage is a floor, not a cap. Declaring less than the presumptive rate is possible only with audited books.
Is there a lock-in if I opt out?
Under 44AD, yes: leaving the scheme bars you from it for the next five assessment years and brings audit requirements with it. 44ADA has no such lock-in. Advance tax under both is payable in a single instalment by 15 March.