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Section 44ADA allows professionals to declare 50% of gross receipts as profit — no books, no audit. Limit: ₹75 lakh. For CA, doctors, lawyers, architects, engineers. File ITR-4.
Under Section 44ADA, professionals declare 50% of gross receipts as their taxable profit. The remaining 50% is deemed to cover all professional expenses — no need to prove actual expenses.
Example: Doctor's gross receipts = ₹30 lakh. Deemed profit = 50% × ₹30L = ₹15 lakh. Tax is paid on ₹15 lakh at income tax slab rates. No need to show actual expenses like rent, staff salary, medicines etc.
Can still claim Chapter VI-A deductions (80C, 80D) on this ₹15L to reduce tax further.
| Step | Amount |
|---|---|
| Gross Professional Receipts | ₹30,00,000 |
| Deemed Profit (50%) | ₹15,00,000 |
| Less: Standard Deduction | (₹75,000) |
| Less: Section 80C | (₹1,50,000) |
| Less: Section 80D (health insurance) | (₹25,000) |
| Net Taxable Income | ₹12,50,000 |
| Tax (New Regime — slab based) | ₹62,500 |
| Add: 4% Cess | ₹2,500 |
| Total Tax Payable | ₹65,000 |
Yes, if you are a freelancer in a specified profession — IT consultant, technical consultant, engineer, architect — you can use 44ADA. Declare 50% of your freelance receipts as profit. IT (software) developers can use 44ADA as 'technical consultant'.
You can declare actual profit if it is higher than 50%. Section 44ADA sets a minimum floor of 50% — you cannot declare less than 50%. If actual profit is, say, 60%, you should declare 60%.
No. Under 44ADA, the 50% not declared as profit is deemed to cover all expenses — rent, salary, internet, equipment, travel. You cannot separately claim any business expenses. However, personal deductions (80C, 80D, HRA) are still allowed.
No specific cash limit for 44ADA (unlike 44AD which has 6%/8% based on digital vs cash). Under 44ADA, it is always 50% regardless of payment mode. However, cash receipts above ₹2 lakh from a single person per day are restricted under income tax.
CA files ITR-4 under presumptive scheme. 50% calculation, 80C/80D deductions, advance tax — all handled. July 31 deadline.
