How presumptive taxation works
| Section 44AD | Section 44ADA | |
|---|---|---|
| Who | Resident individuals, HUFs and firms (not LLPs) in business | Specified professionals: doctors, lawyers, CAs, engineers, architects, consultants and similar |
| Deemed profit | 6% of digital receipts, 8% of cash | 50% of gross receipts |
| Turnover limit | ₹2 crore (₹3 crore if cash is 5% or less) | ₹50 lakh (₹75 lakh if cash is 5% or less) |
| Books & audit | No detailed books or tax audit needed if you declare at least the deemed profit | |
You can declare a higher profit. Declaring less than the deemed rate needs books of account and may need a tax audit. Leaving 44AD blocks you from returning to it for five years.
Most presumptive taxpayers file ITR-4. Let us file it for you.
Frequently Asked Questions
Can an LLP use section 44AD?
No. 44AD is for resident individuals, HUFs and partnership firms, not LLPs or companies.
Do I need to keep books under presumptive taxation?
Detailed books are not required for the presumptive income, but keep invoices and bank records.
Can freelancers in IT use 44ADA?
Many technical consultants qualify as specified professionals. Check whether your work falls in the notified list.
When is advance tax due under 44AD/44ADA?
The full advance tax can be paid in a single instalment by 15 March.
This calculator gives an estimate based on the rules shown above. Rates and limits change through budgets and notifications – confirm with a professional before you file or pay.