Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Presumptive income for professionals
Section 44ADA simplifies tax for small professionals. Rather than tracking every expense and keeping full books, you presume your income to be 50% of gross receipts — the law assumes the other 50% covers your costs. You pay tax on that presumed income at your slab rates. It mirrors Section 44AD (for businesses) but for the professions.
Who and what it covers
It applies to specified professionals — medical, legal, engineering, architecture, accountancy, technical consultancy, interior decoration and others — with receipts within the ₹50/75 lakh limit. Benefits: no detailed books, no tax audit, simpler filing. You can declare higher than 50% but to declare lower you must keep books and audit. Confirm current conditions.
A worked example
Example: a freelance architect with ₹30 lakh receipts uses 44ADA — declares ₹15 lakh income, pays tax on it, and files a simple return without an audit. If his real expenses were only ₹5 lakh, presumptive taxation actually saves him tax (he’s taxed as if he spent ₹15 lakh). It is a genuine simplification for many professionals. Our team can compute and file under 44ADA.