A consultant in a specified profession can use Section 44ADA presumptive taxation — declare just 50% of gross receipts as income (receipts up to Rs75 lakh), pay slab tax on that and file ITR-4 with no books of account. Clients deduct 10% TDS under Section 194J, which you claim back in your return. GST at 18% applies once turnover crosses Rs20 lakh.
Section 44ADA Presumptive Taxation
Under the Section 44ADA presumptive scheme, an eligible professional declares 50% of gross receipts as taxable income; the other half is deemed to cover all expenses. No books of account and no tax audit are required, and you can declare a higher figure if actual profit is more.
- Receipts limit: up to Rs75 lakh a year, provided cash receipts are 5% or less of turnover (otherwise the limit stays Rs50 lakh).
- Eligible professions: legal, medical, engineering, architecture, accountancy, technical consultancy, interior decoration and other CBDT-notified professions.
- Deemed income: a flat 50% of receipts — no separate deduction for laptop, rent, travel or software.
- Deductions still allowed: Chapter VI-A investments such as 80C, 80D and 80CCD(1B) remain claimable under the old regime.
Section 44ADA covers only specified professions. A management consultant, HR consultant, financial advisor or many pure IT/software consultants are treated as running a business — they use Section 44AD (6%/8% of turnover presumptive) instead of 44ADA. Confirm your profession category before opting in.
Not sure whether 44ADA or 44AD applies to your work?
Get 44ADA Eligibility Check →How Consultant Income Is Taxed
The section, TDS rate and ITR form depend on the nature of your consulting work.
| Income Type | Section | Taxed On | TDS | ITR Form |
|---|---|---|---|---|
| Professional fees (legal, CA, doctor, engineer) | 44ADA | 50% of receipts | 194J — 10% | ITR-4 |
| Technical services (IT, software, technical consultancy) | 44ADA / PGBP | 50% of receipts | 194J — 2% | ITR-4 |
| Management / non-technical consultant | 44AD (business) | 6%/8% of turnover | 194J — 10% | ITR-4 |
| Foreign-client consulting (export of services) | 44ADA | Slab; GST zero-rated (LUT) | No TDS (foreign payer) | ITR-3 / ITR-4 |
| Salary + consulting combined | Salary + PGBP | Slab on both heads | 192 + 194J | ITR-3 |
| Books maintained or receipts > Rs75L | PGBP (regular) | Actual profit | 194J | ITR-3 |
ITR-4 (Sugam) suits presumptive consultants; ITR-3 is required if you keep books, exceed the 44ADA limit, or combine salary with a business/profession. Verify on the e-filing portal before submitting.
If you opt out of 44ADA after opting in, you are locked out of the scheme for the next five assessment years and a tax audit becomes mandatory if your income exceeds the basic exemption limit. Choose your first-year position carefully.
New vs Old Regime for Consultants
The new regime is the default from AY 2026-27. A resident individual pays nil tax up to Rs12 lakh of taxable income after the Section 87A rebate. Consultants who want to claim 80C/80D/80CCD(1B) deductions can still opt for the old regime, but opting for the old regime with business/profession income needs Form 10-IEA.
| Taxable Income (New Regime) | Rate |
|---|---|
| Up to Rs4,00,000 | Nil |
| Rs4,00,001 – Rs8,00,000 | 5% |
| Rs8,00,001 – Rs12,00,000 | 10% |
| Rs12,00,001 – Rs16,00,000 | 15% |
| Rs16,00,001 – Rs20,00,000 | 20% |
| Rs20,00,001 – Rs24,00,000 | 25% |
| Above Rs24,00,000 | 30% |
AY 2026-27 new-regime slabs. Section 87A rebate makes tax nil up to Rs12,00,000 taxable income for resident individuals. Cess 4% extra; surcharge capped at 25% under the new regime.
New regime (default) — lower slabs
- Nil tax up to Rs12L taxable income (87A rebate)
- Rs75,000 standard deduction (salary only)
- No 80C / 80D / most Chapter VI-A deductions
- Simpler — suits 44ADA consultants without big investments
Old regime (optional) — deductions
- 87A rebate up to Rs5L income
- Rs50,000 standard deduction (salary)
- Full 80C, 80D, 80CCD(1B), home-loan interest
- Needs Form 10-IEA to opt in with profession income
44ADA consultant · Rs40L receipts
44ADA consultant · Rs20L receipts
Compare both regimes on your actual numbers before you file.
Open Old vs New Calculator →GST and TDS for Consultants
Two separate obligations sit alongside income tax: GST on the services you supply, and TDS that your clients deduct from your fees.
| GST Scenario | Applicable? | Rate | Note |
|---|---|---|---|
| Domestic consulting services | Yes (if > Rs20L) | 18% | SAC 9983 · Rs10L in special-category states |
| Export of services (foreign client, forex) | Zero-rated | 0% | File LUT to supply without paying IGST |
| Healthcare / medical professional services | Exempt | Nil | Patient care is GST-exempt |
| Legal services to a business | RCM | 18% | Recipient pays under reverse charge |
| Turnover below Rs20L | No | — | Voluntary registration possible |
GST-registered consultants can claim ITC on business inputs (laptop, software, office rent) and file GSTR-1 and GSTR-3B.
- Section 194J: clients deduct 10% TDS on professional fees (2% on technical services) once payments cross Rs30,000 in a year.
- No PAN: TDS jumps to 20%; being a non-filer for the prior year can trigger higher TDS under Section 206AB.
- Claiming credit: reconcile TDS in your Form 26AS / AIS and claim it in the ITR — excess over your tax liability is refunded.
Cross Rs20L and need GST registration plus monthly returns?
Get GST for Consultants →Advance Tax & Compliance Checklist
If your total tax liability after TDS exceeds Rs10,000, advance tax applies. A 44ADA consultant gets a concession: the entire advance tax can be paid in a single instalment by 15 March.
| Instalment | Due Date | Cumulative % | Note |
|---|---|---|---|
| 1st | 15 June 2026 | 15% | Optional for 44ADA if fully paid by 15 March |
| 2nd | 15 September 2026 | 45% | Cumulative |
| 3rd | 15 December 2026 | 75% | Cumulative |
| 4th | 15 March 2027 | 100% | Full year for 44ADA if skipped earlier |
Shortfall attracts interest under Sections 234B and 234C. Non-presumptive consultants must pay all four instalments.
- Choose 44ADA vs 44AD vs regular
- Select new vs old regime (Form 10-IEA if old)
- Estimate & pay advance tax
- Track TDS in Form 26AS / AIS
- GST registration if > Rs20L
- LUT filing for export of services
- File ITR-4 or ITR-3 by due date
- Verify the return (e-verify / ITR-V)
- GSTR-1 & GSTR-3B (if registered)
- Keep receipt & invoice records
Even under 44ADA where books are not required, keep a simple record of receipts and client invoices. If the department queries your turnover, clean records make the presumptive claim easy to defend and speed up any TDS refund.
Frequently Asked Questions
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