Who is eligible for Section 44ADA in FY 2026-27?

Professionals like software developers, lawyers, doctors, engineers, accountants, and consultants with gross receipts up to ₹75 Lakhs can opt for this scheme. The threshold was increased from ₹50L to ₹75L in recent budgets for those with less than 5% cash receipts.

Section 44ADA Tax Calculator India 2026-27

Q: What is Section 44ADA?

Section 44ADA is a presumptive taxation scheme for small professionals in India. It allows you to declare 50% of your gross receipts as your taxable profit, eliminating the need to maintain detailed books of accounts or get an audit if your receipts are below ₹75 Lakhs.

What is Section 44ADA?

Section 44ADA of the Income Tax Act provides a simplified "presumptive" taxation scheme for small professionals. Instead of maintaining complex books of accounts and tracking every single expense, you can simply declare 50% of your gross receipts as your profit and pay tax on that amount.

Who is eligible?

Eligibility is restricted to specific professions, including:

IT Professionals (Software developers, consultants)
Legal, Medical, Engineering, and Architectural professionals
Accountants (CAs, CS)
Technical consultants and Interior decorators
Film artists and editors

The ₹75 Lakh Limit

As per the Finance Act, the limit for Section 44ADA is ₹50 Lakhs. However, this is increased to ₹75 Lakhs if your cash receipts are less than 5% of your total gross receipts. In the digital age of freelancing (Wise, PayPal, Stripe, Bank Transfers), almost every freelancer qualifies for the ₹75L limit.

Benefits of 44ADA

No Books of Accounts: You don't need to save every coffee or internet bill.
Tax Efficiency: If your actual expenses are lower than 50% (which is common for solo developers/consultants), you pay tax on a lower amount than your actual profit.
Simplified Audits: You are exempt from the mandatory tax audit under Section 44AB as long as you stay within the threshold.

Note on New Tax Regime: In the New Tax Regime, the standard deduction of ₹75,000 is NOT available for professionals under 44ADA. It is only for salaried employees.

Advance Tax for Freelancers

If your total tax liability for the year exceeds ₹10,000, you are required to pay Advance Tax. For those under Section 44ADA, you have the option to pay the entire advance tax in a single installment by March 15th of the financial year. However, many choose to pay quarterly to manage cash flow. Our calculator provides the standard quarterly schedule to help you stay compliant and avoid interest under Section 234B/C.