Income Tax Guide · FY 2025-26

Section 44ADA —
50% Presumptive Tax for Professionals

Q: Who is eligible for Section 44ADA?

Section 44ADA is available to resident individuals, HUFs and partnership firms (not LLPs or companies) carrying on a specified profession under Section 44AA(1): medical, legal, engineering, architecture, accountancy (CA/CMA/CS), technical consultancy, interior decoration and professions notified by the CBDT. The taxpayer must be resident in India and gross receipts must be within the applicable limit.

Q: Can a doctor use Section 44ADA?

Yes. Doctors — general practitioners, specialists, dentists and other medical professionals — are among the most common users of 44ADA. A doctor with Rs 60 lakh of receipts can declare Rs 30 lakh (50%) as income without maintaining books or getting a tax audit, file ITR-4 and pay advance tax on the declared income.

Q: Can a freelancer or IT consultant use Section 44ADA?

Yes, if the work qualifies as technical consultancy or another specified profession — many freelance software developers, designers and consultants use 44ADA. If your activity is really a business (trading, reselling) rather than a profession, you should use Section 44AD instead, which uses a 6%/8% rate and a higher turnover limit.

Q: Can an LLP claim Section 44ADA?

No. Limited Liability Partnerships (LLPs) and companies are not eligible for Section 44ADA. Only resident individuals, HUFs and ordinary partnership firms carrying on a specified profession can opt for it.

Q: What is the income limit for Section 44ADA in FY 2025-26?

For FY 2025-26 (AY 2026-27) the gross receipts limit is Rs 75 lakh if cash receipts are 5% or less of total receipts (95%+ received digitally/through banking), and Rs 50 lakh if cash receipts exceed 5%. In both cases, 50% of gross receipts is deemed to be net income.

Q: How is income calculated under Section 44ADA?

A flat 50% of your gross professional receipts is treated as your taxable income. No deduction for actual expenses (rent, salaries, depreciation) is allowed beyond this 50% presumption. You may voluntarily declare a higher income if your real profit is more than 50%.

Q: What is the difference between the Rs 50 lakh and Rs 75 lakh limit?

The higher Rs 75 lakh limit applies only when cash receipts are 5% or less of total gross receipts — i.e. at least 95% is received through banking or digital channels. If your cash receipts exceed 5%, your 44ADA ceiling is Rs 50 lakh. This higher digital limit has applied from AY 2024-25 onwards.

Q: Can I declare more than 50% of receipts as income?

Yes. 50% is a minimum presumption, not a cap. If your actual profit is higher, you can declare the higher figure. What you cannot do without a tax audit is declare less than 50% when your total income is above the basic exemption limit.

Q: What if my actual profit is less than 50% under Section 44ADA?

If your actual profit is below 50% of gross receipts and your total income exceeds the basic exemption limit, you cannot use 44ADA freely — you must either accept 50% as income, or declare the lower actual income and get a mandatory tax audit under Section 44AB while maintaining books of accounts. If total income is below the exemption limit, you can declare actual income without audit.

Q: Do I need to maintain books of accounts under Section 44ADA?

No. A key benefit of 44ADA is that you do not have to maintain regular books of accounts (cash book, ledger, journal) or get a tax audit — provided you declare at least 50% of receipts as income and stay within the receipts limit. You should still keep basic records of receipts (invoices, bank statements).

How doctors, lawyers, CAs, architects and consultants can declare 50% of gross receipts as income — no books, no tax audit — the Rs 75L / Rs 50L limits, ITR-4 and advance tax rules for AY 2026-27.

Updated for AY 2026-27 CA Expert Reviewed Doctors · CAs · Lawyers · Consultants

File My ITR-4 See the limits

50%Deemed income

Rs 75LDigital-receipts limit

ITR-4Return form

15 MarAdvance tax due

Quick Answer

Section 44ADA lets resident professionals — doctors, lawyers, CAs, architects, engineers, interior designers and technical consultants — declare a flat 50% of gross receipts as income, with no books of accounts and no tax audit. Available if gross receipts are up to Rs 75 lakh (when cash receipts are 5% or less) or Rs 50 lakh otherwise. You file ITR-4 (Sugam) and pay advance tax in a single instalment by 15 March.

Deemed income 50%

Limit (digital) Rs 75L

Limit (cash>5%) Rs 50L

Return form ITR-4

Who can use it

Eligibility Under Section 44ADA

44ADA is only for resident individuals, HUFs and partnership firms (not LLPs, not companies) carrying on a "specified profession" listed under Section 44AA(1). If you run a business rather than a profession, you use Section 44AD instead.

Profession	Examples	Eligible
Medical	Doctors, surgeons, dentists, physicians	Yes
Legal	Advocates, lawyers, legal consultants	Yes
Engineering	Civil, mechanical, software engineers (consulting)	Yes
Architecture	Architects, urban planners	Yes
Accountancy	Chartered Accountants, CMAs, Company Secretaries	Yes
Technical consultancy	IT / management / technical consultants	Yes
Interior decoration	Interior designers, decorators	Yes
Non-specified work	Traders, manufacturers, commission agents	No · use 44AD
LLP / company	Any LLP or company	No

Specified professions are those in Section 44AA(1) read with Rule 6F, plus professions notified by the CBDT (e.g. authorised representatives, film artists).

What "profession" vs "business" means

44ADA applies to a profession; 44AD applies to a business. A freelance software developer offering technical consultancy is usually a profession (44ADA @ 50%); someone reselling software licences is a business (44AD @ 6%/8%). If you are unsure how your work is classified, get it confirmed before you file.

The two thresholds

Gross Receipts Limit for FY 2025-26

The limit depends on how you are paid. The higher Rs 75 lakh ceiling applies only when cash receipts are 5% or less of total gross receipts (i.e. at least 95% is received through banking or digital channels). If cash is more than 5%, the limit drops to Rs 50 lakh.

Condition	Gross receipts limit	Deemed income
Cash receipts ≤ 5% of total (95%+ digital)	Rs 75 lakh	50%
Cash receipts > 5% of total	Rs 50 lakh	50%
Receipts above the limit	44ADA not available	Normal / audit

Deemed income is 50% of gross receipts; you may always declare a higher income if actual profit is more.

Declaring below 50% triggers a tax audit

If your actual profit is less than 50% of receipts and your total income exceeds the basic exemption limit, you cannot use 44ADA without a tax audit under Section 44AB and maintaining books. You must either accept 50% as income, or declare the lower actual income and get audited.

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Common confusion

Section 44ADA vs Section 44AD

Both are presumptive schemes, but 44ADA is for professionals at a 50% rate while 44AD is for businesses at 6% (digital) or 8% (cash) with a far higher turnover ceiling.

50%

Section 44ADA — professionals

Specified professions only (44AA(1))
Deemed income 50% of gross receipts
Limit Rs 75L digital / Rs 50L cash
Resident individual / HUF / firm
File ITR-4 (Sugam)

6/8%

Section 44AD — businesses

Any eligible business (not profession)
Deemed income 6% digital / 8% cash
Limit Rs 3cr digital / Rs 2cr cash
Resident individual / HUF / firm
File ITR-4 (Sugam)

Parameter	44ADA (Professionals)	44AD (Business)
Deemed income	50% of gross receipts	6% (digital) / 8% (cash)
Receipts / turnover limit	Rs 75L / Rs 50L	Rs 3cr / Rs 2cr
Books of accounts	Not required	Not required
Tax audit	Only if income < 50% & above exemption	Only if income < 6%/8% & above exemption
ITR form	ITR-4 (Sugam)	ITR-4 (Sugam)
Advance tax	Single instalment by 15 March	Single instalment by 15 March
LLP eligible?	No	No

Worked example

How 44ADA Works — Rs 60 Lakh Receipts

A doctor or consultant with Rs 60 lakh of digital gross receipts declares 50% — Rs 30 lakh — as income, without proving a single expense. Tax is then charged on that Rs 30 lakh under the applicable slab (after any eligible deductions).

Deemed income under 44ADA

Gross receipts (digital)Rs 60,00,000

Deemed @ 50%Rs 30,00,000

Expenses to proveNil

Presumptive incomeRs 30,00,000

Advance tax convenience

Instalments1 (not 4)

Due date15 March

Books / auditNone

ComplianceSimplified

Under the new tax regime (default from AY 2024-25), a resident gets a rebate under Section 87A making income up to Rs 12 lakh taxable effectively tax-free — but 44ADA presumptive income of Rs 30 lakh is well above that, so slab tax applies. Chapter VI-A deductions (80C, 80D etc.) are largely available only if you opt for the old regime.

Advance tax still applies

44ADA does not remove advance tax — it simplifies it. If your tax after TDS exceeds Rs 10,000, pay the entire advance tax in one instalment by 15 March. Miss it and interest under Sections 234B / 234C applies.

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Stay compliant

44ADA Filing Checklist

Confirm your work is a specified profession
Check receipts within Rs 75L / Rs 50L limit
Compute cash vs digital receipts split
Declare 50% (or higher) as income
Choose new vs old regime
Pay advance tax by 15 March
File ITR-4 (Sugam) before due date
Keep receipt records (invoices, bank)
Deduct/deposit any TDS you owe
Avoid opting out for 5 years

Income-tax Act, 2025 — what changes

From 1 April 2026, the Income-tax Act 2025 merges Sections 44AD, 44ADA and 44AE into a single Section 58. The 50% presumptive rate and the Rs 75L / Rs 50L limits for professionals are retained unchanged — so keep using "Section 44ADA" as your reference for FY 2025-26, and note the new Section 58 number will appear from AY 2027-28.

44ADA works best for practising professionals with low real expenses. If your genuine costs exceed 50% of receipts, normal computation with books and audit may reduce your tax — get it modelled before you commit.

File your professional income return with a CA-led team.

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Government sourcesAct & forms: incometax.gov.in · Section 44ADA / 44AA(1), Income-tax Act 1961 · Rs 75L limit: Finance Act 2023 (eff AY 2024-25) · Section 58, Income-tax Act 2025 (eff 1 Apr 2026)

Section 44ADA — Frequently Asked Questions

Eligibility

Who is eligible for Section 44ADA?

Section 44ADA is available to resident individuals, HUFs and partnership firms (not LLPs or companies) carrying on a specified profession under Section 44AA(1): medical, legal, engineering, architecture, accountancy (CA/CMA/CS), technical consultancy, interior decoration and professions notified by the CBDT. The taxpayer must be resident in India and gross receipts must be within the applicable limit.

Can a doctor use Section 44ADA?

Yes. Doctors — general practitioners, specialists, dentists and other medical professionals — are among the most common users of 44ADA. A doctor with Rs 60 lakh of receipts can declare Rs 30 lakh (50%) as income without maintaining books or getting a tax audit, file ITR-4 and pay advance tax on the declared income.

Can a freelancer or IT consultant use Section 44ADA?

Yes, if the work qualifies as technical consultancy or another specified profession — many freelance software developers, designers and consultants use 44ADA. If your activity is really a business (trading, reselling) rather than a profession, you should use Section 44AD instead, which uses a 6%/8% rate and a higher turnover limit.

Can an LLP claim Section 44ADA?

No. Limited Liability Partnerships (LLPs) and companies are not eligible for Section 44ADA. Only resident individuals, HUFs and ordinary partnership firms carrying on a specified profession can opt for it.

Limits & Income

What is the income limit for Section 44ADA in FY 2025-26?

For FY 2025-26 (AY 2026-27) the gross receipts limit is Rs 75 lakh if cash receipts are 5% or less of total receipts (95%+ received digitally/through banking), and Rs 50 lakh if cash receipts exceed 5%. In both cases, 50% of gross receipts is deemed to be net income.

How is income calculated under Section 44ADA?

A flat 50% of your gross professional receipts is treated as your taxable income. No deduction for actual expenses (rent, salaries, depreciation) is allowed beyond this 50% presumption. You may voluntarily declare a higher income if your real profit is more than 50%.

What is the difference between the Rs 50 lakh and Rs 75 lakh limit?

The higher Rs 75 lakh limit applies only when cash receipts are 5% or less of total gross receipts — i.e. at least 95% is received through banking or digital channels. If your cash receipts exceed 5%, your 44ADA ceiling is Rs 50 lakh. This higher digital limit has applied from AY 2024-25 onwards.

Can I declare more than 50% of receipts as income?

Yes. 50% is a minimum presumption, not a cap. If your actual profit is higher, you can declare the higher figure. What you cannot do without a tax audit is declare less than 50% when your total income is above the basic exemption limit.

Audit & Books

What if my actual profit is less than 50% under Section 44ADA?

If your actual profit is below 50% of gross receipts and your total income exceeds the basic exemption limit, you cannot use 44ADA freely — you must either accept 50% as income, or declare the lower actual income and get a mandatory tax audit under Section 44AB while maintaining books of accounts. If total income is below the exemption limit, you can declare actual income without audit.

Do I need to maintain books of accounts under Section 44ADA?

No. A key benefit of 44ADA is that you do not have to maintain regular books of accounts (cash book, ledger, journal) or get a tax audit — provided you declare at least 50% of receipts as income and stay within the receipts limit. You should still keep basic records of receipts (invoices, bank statements).

Can I claim depreciation or actual expenses under 44ADA?

No separate deduction for expenses or depreciation is allowed — the 50% presumption is deemed to already account for all expenses and depreciation. However, you can still claim Chapter VI-A deductions (like 80C, 80D) against the presumptive income, mainly if you opt for the old tax regime.

Filing & Advance Tax

Which ITR form is used for Section 44ADA?

ITR-4 (Sugam) is the form for presumptive income under Section 44ADA, for resident individuals, HUFs and firms (other than LLPs). It is the simplest return for professionals and does not require a detailed balance sheet or profit-and-loss statement.

Is advance tax required under Section 44ADA?

Yes, but simplified. If your tax liability after TDS exceeds Rs 10,000, the entire advance tax can be paid in a single instalment by 15 March of the financial year, instead of the usual four instalments. If not paid by 15 March, interest under Sections 234B and 234C applies on the shortfall.

Does 44ADA work with the new tax regime?

Yes. You can compute presumptive income under 44ADA and then be taxed under either the new (default) or old regime. Under the new regime a resident gets an 87A rebate up to Rs 12 lakh of taxable income, but most Chapter VI-A deductions are only available in the old regime — so compare both before filing.

What happens if I opt out of Section 44ADA?

If you declare presumptive income and later declare income below 50% within the next five assessment years, you become ineligible for 44ADA for five years and must maintain books and get a tax audit if your income exceeds the basic exemption limit. Plan continuity before opting in.

Is Section 44ADA changing under the Income-tax Act 2025?

The Income-tax Act 2025, effective 1 April 2026, merges Sections 44AD, 44ADA and 44AE into a single Section 58. The 50% presumptive rate and the Rs 75 lakh / Rs 50 lakh limits for professionals are retained unchanged. For FY 2025-26 you still file under Section 44ADA; the new Section 58 reference applies from AY 2027-28.

Done-for-you

Related TaxClue Services

ITR Filing (ITR-4)CA-assisted presumptive return for professionals, done online.Explore →Income Tax CalculatorEstimate tax on your 44ADA presumptive income in minutes.Explore →Tax Audit (44AB)If you declare below 50%, we handle your Section 44AB audit.Explore →TDS Return FilingDeduct and file TDS correctly on payments you make.Explore →

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Section 44AD (Business)ITR-4 (Sugam) Form Tax Audit under Section 44AB Advance Tax Due Dates Income Tax Slabs 2025-26 Income Tax Calculator

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