Calculate your deemed taxable income and tax savings under Section 44AD (businesses up to ₹3 Crore) and Section 44ADA (professionals up to ₹75 Lakh) without maintaining detailed books.
Benefits of Presumptive Taxation in India
Presumptive taxation under the Income Tax Act allows eligible small businesses and professionals to declare income at a flat statutory percentage:
Section 44AD (Small Businesses): Limit up to ₹3 Crore (if cash receipts ≤ 5%). Deemed profit: 6% on digital receipts and 8% on cash receipts.
Section 44ADA (Professionals / Freelancers): Limit up to ₹75 Lakh (if cash receipts ≤ 5%). Deemed profit: 50% of gross receipts.
Key Relief: Complete exemption from maintaining detailed books of accounts (Sec 44AA) and mandatory CA Tax Audit (Sec 44AB). Pay 100% Advance Tax in a single installment by 15th March.
Formula
44AD Taxable Income = (Digital Receipts × 6%) + (Cash Receipts × 8%) 44ADA Taxable Income = Gross Professional Receipts × 50%
Frequently Asked Questions
The turnover threshold is ₹3 Crore for businesses and ₹75 Lakh for professionals, provided cash receipts do not exceed 5% of total gross turnover.
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Yes, you can declare actual higher profit if you earned more, but declaring less than the statutory rate requires maintaining books and undergoing a mandatory Tax Audit by a Chartered Accountant.