Section 44ADA Presumptive Tax Calculator for Freelancers
- Author:
- Manoj Sharma
- Verified by:
- Editorial team
- Published:
- Last modified:
Works out the presumptive income of a professional at 50 percent of gross receipts, checks the turnover limit and shows the income that goes to tax.
Receipts limit that applies
₹75,00,000
Deemed profit at 50%
₹12,00,000
Presumptive income declared
₹12,00,000
Cash is 0.0% of receipts, so the limit is ₹75 lakh (cash 5% or less).
Section 58 of the Income-tax Act 2025 (formerly section 44ADA) from tax year 2026-27, for resident individuals and firms other than LLPs in specified professions. This calculates income, not tax. Declaring less than 50% has extra conditions.
What does the Section 44ADA Presumptive Tax Calculator for Freelancers calculate?
| Item | Type | What it means | Best for |
|---|---|---|---|
| Gross receipts | Input | Total professional receipts for the tax year, including payments from foreign clients, in rupees | Freelancers and consultants on presumptive taxation |
| Cash receipts | Input | Part of the receipts received in cash, including cheques that are not account payee | Checking whether the higher limit of Rs 75 lakh applies |
| Actual profit (optional) | Input | The profit you actually earned, if you keep books and want to compare | Deciding whether to declare a profit above 50 percent |
| Applicable limit | Output | Rs 50 lakh, or Rs 75 lakh when cash receipts do not exceed 5 percent of gross receipts | Checking if the scheme is open to you |
| Presumptive income | Output | 50 percent of gross receipts, or the actual profit if higher | The figure to report as business or professional income |
| Result flag | Output | Within limit or above limit, and a note on books and audit if actual profit is lower | Planning records and filing |
How is the Section 44ADA Presumptive Tax for Freelancers calculation done?
Presumptive income is 50 percent of gross receipts, or the profit actually earned if that is higher. The scheme applies when gross receipts do not exceed Rs 50 lakh, or Rs 75 lakh when cash receipts are 5 percent or less of gross receipts. The calculator applies these limits and the 50 percent rate.
Limit = Rs 75,00,000 if cash receipts <= 5% of gross receipts, else Rs 50,00,000. If gross receipts <= limit: presumptive income = max(50% x gross receipts, actual profit declared)
For example, a consultant has gross receipts of Rs 30,00,000 with cash receipts of Rs 0. The limit is Rs 75,00,000, which is above the receipts, so the scheme is available. Presumptive income = 50% x 30,00,000 = Rs 15,00,000. Tax on that income is then worked out at the rates for the year.
How do you use the Section 44ADA Presumptive Tax Calculator for Freelancers?
- Enter your gross receipts for the tax year in rupees, including payments received from foreign clients.
- Enter the amount received in cash, counting a cheque that is not account payee as cash.
- Optionally enter the profit you actually earned if you keep books.
- Read the applicable limit and whether your receipts are within it.
- Read the presumptive income and use it with the tax rates for the year to estimate tax.
What does your result mean?
The result is the income deemed to be your profit, with no need to claim expenses against it. If receipts are above the limit, the scheme is not open and ordinary books apply. If your actual profit is lower and total income exceeds the basic exemption limit, books and a tax audit are required.
- Within limit: You may declare 50 percent of gross receipts as income without claiming expenses.
- Above limit: The scheme does not apply, so profit is computed from books of account.
- Lower actual profit: Declaring less than 50 percent needs books under section 62 and an audit under section 63 if total income exceeds the basic exemption limit.
- Cash test: Cash receipts above 5 percent of gross receipts reduce the limit to Rs 50 lakh.
What does the Section 44ADA Presumptive Tax Calculator for Freelancers assume, and what does it not cover?
- Provision: Section 58 of the Income-tax Act, 2025 applies from tax year 2026-27. It replaced section 44ADA of the Income-tax Act, 1961, which applied up to tax year 2025-26.
- Who qualifies: A resident individual or firm other than an LLP, carrying on a specified profession under section 62(4), such as legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, information technology or company secretary work.
- Not covered: Tax rates, surcharge, cess, rebates and deductions are not calculated. The tool stops at presumptive income.
- Other income: Interest, capital gains and other income are outside the scheme and are not added.
What do people get wrong when calculating this?
- Using the old section only: People still search for section 44ADA, but for tax year 2026-27 onwards the provision is section 58.
- Counting only Indian receipts: Gross receipts include payments from foreign clients.
- Ignoring cash: A cheque that is not account payee counts as cash under section 58(9).
- Claiming expenses on top: Expenses and depreciation are deemed allowed. Under section 58(4) no further loss, allowance or deduction is allowed against the presumptive income.
Which rules should you know about this?
Section 58 of the Income-tax Act, 2025, Table serial number 3, sets 50 percent of gross receipts for a specified profession, with limits of Rs 50 lakh and Rs 75 lakh. The Income Tax Department FAQ on the new Act explains that sections 44AD, 44ADA and 44AE were consolidated into section 58.
Related guides: section 44ada freelancers, 44ad vs 44ada, what is section 44ada, advance tax freelancers.
How did we verify this?
Every rule and fee is linked to its official or first-party source below with the date it was checked. The full method is on the methodology page.
- Income-tax Act, 2025 (Income Tax Department), Section 58(1) to (4), (9) and (11); Table serial number 3; section 62(4) (checked 9 Oct 2026)
- Income-tax Act, 2025 as enacted (Gazette of India), Section 58 as enacted (checked 9 Oct 2026)
- Income Tax Department: Objective and scope of the new Act (FAQ), Presumptive sections 44AD, 44ADA and 44AE consolidated into section 58; 1961 Act repealed from 1 April 2026 (checked 9 Oct 2026)
Frequently asked questions
Is Section 44ADA still the right name for the presumptive scheme for professionals?
Section 44ADA belongs to the Income-tax Act, 1961, which applied up to tax year 2025-26. From tax year 2026-27 the same scheme sits in section 58 of the Income-tax Act, 2025, Table serial number 3. The Income Tax Department's FAQ says sections 44AD, 44ADA and 44AE were merged.
What is the turnover limit under the Section 44ADA scheme?
The limit is Rs 50 lakh of gross receipts. It rises to Rs 75 lakh when the amount received in cash is 5 percent or less of gross receipts, as set out in the table in section 58(2). A cheque that is not account payee counts as cash for this test.
Do foreign client payments count as gross receipts under Section 44ADA?
Yes. Under section 5(1), a resident's total income includes income that accrues or arises outside India, so fees from foreign clients count as gross receipts. A person who is not ordinarily resident is taxed on foreign income only if it comes from a business controlled in, or a profession set up in, India. Use the rupee value received.
Can a freelancer declare less than 50 percent under the Section 44ADA scheme?
A professional can claim a lower profit, but then section 58(3) requires books of account under section 62 and an audit under section 63 if total income exceeds the maximum amount not chargeable to tax. The calculator flags this case when the actual profit entered is below 50 percent.
Does the Section 44ADA calculator show the tax payable?
No. The calculator ends at presumptive income. Tax depends on the tax regime chosen, the slab rates for the year, other income, deductions that remain available, surcharge and cess. Take the presumptive income to the advance tax calculator or to a tax professional to estimate the liability.