Taxation

Link copied!

Presumptive Taxation Calculator

Estimate tax payable under Section 44AD/44ADA for freelancers and small professionals. Adjust any input below and your results update instantly.

Understanding presumptive taxation

The concept, the motivation, and what to watch out for.

Skip the books and the audit — declare a fixed percentage of turnover as profit instead

Presumptive taxation lets small businesses (Section 44AD) and specified professionals (Section 44ADA) — doctors, lawyers, engineers, architects, accountants, and a few others — declare a flat percentage of their turnover as taxable profit, without maintaining detailed books of account or getting audited, as long as turnover stays under the applicable ceiling.

The catch: declaring anything below that percentage forfeits the exemption once your total income crosses the basic exemption limit, and — for businesses only — locks you out of the scheme entirely for 5 years if you'd opted in before. This calculator applies the exact ceiling and rate rules for both sections, including the digital-vs-cash split that most simplified calculators skip.

The business rate is blended, not flat

Turnover received digitally is taxed at 6%, cash at 8% — a business with a mix of both pays a weighted-average rate between the two, not a single flat number.

Only 44AD has a 5-year lock-out for opting out

Professionals under 44ADA can move in and out of the scheme year to year freely — businesses under 44AD cannot, once they've opted in and then declared lower profit.

How this calculator helps

Enter your turnover and payment mix — see your eligible ceiling, presumptive income, and the tax due, with or without declaring below the statutory minimum.

Calculate your presumptive tax

Fill in the starred fields on the left — your results update instantly on the right.

Your details

Specified profession (44ADA)

Off models a business under Section 44AD instead.

Compute tax under the old regime

Off assumes the new regime (the default since FY 2023-24).

Annual gross receipts (₹)*

≈ ₹40.00 L

The ₹75L extended ceiling only applies if cash receipts stay at or below 5% of the total — otherwise the ₹50L basic ceiling applies.

₹1L₹1Cr

e.g. ₹40,00,000 a year

Received digitally/via banking (%)*

The rest is assumed received in cash — this affects both your eligible turnover ceiling and (for businesses) your blended presumptive rate.

0%100%

e.g. 100% (fully digital)

Your actual profit (%) — if different*

Set this to model declaring a different profit percentage than the statutory presumptive rate — either higher or lower.

0%100%

e.g. 50% (matches the presumptive minimum)

These are example numbers. Edit any input on the left to see your own.

Your presumptive income

₹20.00 L

50.0% of turnover · eligible

Tax due

₹1.92 L

Net after tax

₹18.08 L

From turnover to net income

Every step from your total turnover down to what you keep after tax.

ComponentAmountStatus

Turnover / receipts₹40.00 L

Total

100% of turnover

Presumptive income (50.0%)₹20.00 L

Statutory minimum

50% of turnover

Tax on presumptive income-₹1.92 L

Tax

5% of turnover

Net income (presumptive)₹18.08 L

After tax

45% of turnover

Compare scenarios

See how switching between business/profession or tax regime changes your net income.

Your plan

Profession (44ADA) · new regime

₹18.08 L

Net income

Baseline

As a business (44AD) instead

Same turnover & mix

₹2.40 L

Net income

-₹15.68 L

Old regime instead

Same presumptive income

₹15.87 L

Net income

-₹2.21 L

Nivesh

Free financial calculators for India

Presumptive Taxation Calculator

Your details

Specified profession (44ADA)

Off models a business under Section 44AD instead.

Compute tax under the old regime

Off assumes the new regime (the default since FY 2023-24).

Annual gross receipts (₹)*

40,00,000

≈ ₹40.00 L

₹1L₹1Cr

e.g. ₹40,00,000 a year

Received digitally/via banking (%)*

100

0%100%

e.g. 100% (fully digital)

Your actual profit (%) — if different*

0%100%

e.g. 50% (matches the presumptive minimum)

Your presumptive income

₹20.00 L

50.0% of turnover · eligible

Tax due

₹1.92 L

Net after tax

₹18.08 L

From turnover to net income

Every step from your total turnover down to what you keep after tax.

ComponentAmountStatus

Turnover / receipts₹40.00 L

Total

100% of turnover

Presumptive income (50.0%)₹20.00 L

Statutory minimum

50% of turnover

Tax on presumptive income-₹1.92 L

Tax

5% of turnover

Net income (presumptive)₹18.08 L

After tax

45% of turnover

Compare scenarios

See how switching between business/profession or tax regime changes your net income.

Your plan

Profession (44ADA) · new regime

₹18.08 L

Net income

Baseline

As a business (44AD) instead

Same turnover & mix

₹2.40 L

Net income

-₹15.68 L

Old regime instead

Same presumptive income

₹15.87 L

Net income

-₹2.21 L

Every formula visible, every result instant.

nivesh.org.in

Worked example, using your numbers

A step-by-step walkthrough from turnover to net income.

Step 1 · Applicable ceiling

With 0% cash receipts, your ceiling is

₹75.00 L

Step 2 · Presumptive income

At 50.0% of turnover, your presumptive income is

₹20.00 L

Step 3 · Net income after tax

After tax under the new regime, you keep

₹18.08 L

✓

Of your ₹40.00 L turnover, ₹18.08 Lis what you’d keep after presumptive tax — with no books of account or audit required.

Personalised insights

What your numbers reveal, and what changing them would do.

You're within the ₹75.00 L ceiling for this scheme

Since your cash receipts are at or below 5%, you qualify for the extended ceiling.

Your presumptive income is a flat 50% of receipts

₹40.00 L in receipts gives a presumptive income of ₹20.00 L, regardless of your digital-vs-cash mix.

You're declaring at or above the statutory minimum — no audit trigger

Declaring at 50% keeps you fully within the scheme's bookkeeping and audit exemption.

Presumptive taxation nets you ₹18.08 L after tax

That's ₹1.92 L in tax on ₹20.00 L of presumptive income, under the new regime.

How this is calculated

Every step of the math behind your result, shown in the open.

Which ceiling applies to you

cash = the % of turnover received in cash, Extended = ₹75L (profession) or ₹3Cr (business), Basic = ₹50L (profession) or ₹2Cr (business)

The higher ceiling only applies if cash receipts stay at or below 5% of your total turnover for the year — otherwise the lower ceiling applies regardless of your actual turnover size.

Example: Cash receipts 0% ≤ 5% → ₹75.00 L ceiling

Presumptive income, blended for businesses

d = % received digitally, c = % received in cash, Income = the presumptive profit declared under Section 44AD

Professionals under 44ADA skip this blend entirely — their rate is a flat 50% of gross receipts regardless of payment mode.

Example: ₹40.00 L × 50% → ₹20.00 L

Tax on the presumptive income

Tax = computed the same way as any other income using the regular old/new regime slab rates

Presumptive income is added to your total income and taxed at the ordinary slab rates — the scheme only simplifies the accounting and audit requirement, not the tax rate itself.

Example: ₹20.00 L taxed at new regime slabs → ₹1.92 L

Assumptions

Assumes presumptive income is your only source of income for the year — other income (salary, capital gains, etc.) would combine with this to determine your actual slab and whether the basic exemption limit is crossed.
The 5-year lock-out for declaring below the presumptive rate (Section 44AD only) and the audit trigger itself aren't computed here — both depend on facts outside a single year's turnover.
Assumes eligibility for the scheme (resident individual/HUF/partnership firm for 44AD, a specified profession for 44ADA) is already established — this doesn't check profession-type eligibility.
Figures are indicative — not financial or tax advice.

Did you know?

A few facts behind how presumptive taxation actually works.

6% / 8%

Going digital genuinely lowers your tax rate

A business receiving turnover digitally is presumed to have made less profit per rupee than one receiving cash (6% vs 8%) — a direct tax incentive for banking-channel transactions.

5 years

Opting out of 44AD isn't a one-year decision

Declare profit below the presumptive rate under Section 44AD once, and you can't use the scheme again for the next 5 assessment years — professionals under 44ADA face no such restriction.

1 instalment

Presumptive taxpayers get a simpler advance tax schedule

Instead of the usual four quarterly instalments, presumptive taxpayers pay their entire advance tax liability in one go, by 15 March.

₹75L

The professional ceiling grew 50% in one Budget

Budget 2023 raised Section 44ADA's receipts ceiling from ₹50 lakh to ₹75 lakh in one move — but only for professionals keeping cash receipts under 5% of the total.

50%

44ADA assumes half your receipts are pure profit

Section 44ADA's flat 50% presumptive rate is far higher than 44AD's 6-8% — reflecting that professional services typically carry much lower overhead costs than trading or manufacturing businesses.

Frequently asked questions

Straight answers to the questions we hear most about presumptive taxation.

What's the difference between Section 44AD and 44ADA?

Section 44AD covers small businesses (resident individuals, HUFs, and partnership firms, not LLPs) with turnover under ₹2 crore (₹3 crore if cash receipts stay under 5%), declaring 6-8% of turnover as profit. Section 44ADA covers specified professionals only — medical, legal, engineering, architecture, accountancy, technical consultancy, interior decoration, IT, and a few others — with receipts under ₹50 lakh (₹75 lakh under the same 5% cash test), declaring a flat 50% of receipts as profit.

Why does my presumptive rate depend on how much I receive in cash?

Only for businesses under Section 44AD — turnover received digitally or via banking channels is taxed at 6%, cash receipts at 8%. A business receiving a mix of both pays a blended rate between the two. Professionals under 44ADA always use a flat 50%, regardless of payment mode.

What happens if I declare profit lower than the presumptive percentage?

You lose the scheme's exemption from maintaining detailed books of account and getting a tax audit, IF your total income for the year exceeds the basic exemption limit. Under Section 44AD specifically, doing this also locks you out of using the presumptive scheme again for the next 5 assessment years — Section 44ADA carries no such lock-out for professionals.

Can I declare a HIGHER profit than the presumptive percentage?

Yes — there's no restriction on declaring more than the statutory minimum, and doing so doesn't trigger any audit requirement or lock-out. Some taxpayers do this deliberately to show a higher income for loan or visa applications, accepting the extra tax in exchange.

Do I still pay advance tax under presumptive taxation?

Yes, but in a single instalment by 15 March, rather than the usual four quarterly instalments most other taxpayers follow — see the Advance Tax Calculator for how the standard schedule works by comparison.

Can I choose the old or new tax regime with presumptive income?

Yes — presumptive taxation under 44AD/44ADA only affects how your business or professional income itself is computed (and the audit/bookkeeping exemption); it doesn't restrict which regime you file under. Your presumptive income is simply taxed at whichever regime's slab rates you choose.