Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Presumptive tax for professionals
Section 44ADA lets eligible professionals — doctors, lawyers, architects, engineers, accountants and other notified professions — pay tax on a presumed profit instead of computing actual income. You declare 50% of your gross receipts as taxable income, and the rest is treated as expenses — no need to maintain detailed books or undergo a tax audit.
The eligibility limit
It applies if your gross professional receipts are within ₹50 lakh a year — raised to ₹75 lakh where cash receipts are 5% or less of the total (digital-receipts incentive). Above the limit, you must compute actual income and likely face an audit. Confirm the current limit per the Finance Act.
A worked example
Example: a doctor with ₹40 lakh of professional receipts opts for 44ADA — declares ₹20 lakh (50%) as income, pays tax on it at slab rates, and avoids bookkeeping and audit. If her actual expenses were under 50%, this also saves tax. A doctor receiving ₹90 lakh is over the limit and computes actual income. See how 44ADA income is computed. Our team can set up your presumptive filing.