Use this presumptive tax calculator to work out your declared income and estimated tax under Section 44ADA for professionals and Section 44AD for small businesses. These schemes let you skip detailed books and declare a fixed percentage of your receipts as profit. The figures here are for FY 2026-27 under the new tax regime.
What is presumptive taxation?
Presumptive taxation lets eligible professionals and small businesses declare a set percentage of their receipts as income, instead of maintaining full books and getting them audited. You can always declare more if your real profit is higher.
Whether overseas project income fits these schemes depends on the work and your facts. If a global AI training platform pays you, our Handshake AI India guide lists the records and tax checks to run first.
Section 44ADA for professionals
If you are in a notified profession such as legal, medical, engineering, architecture, accountancy, technical consultancy, interior decoration, or you are a film artist or an authorised representative, you can use 44ADA. You declare at least 50 percent of your gross receipts as income. The limit is Rs 50 lakh of receipts, raised to Rs 75 lakh if your cash receipts are 5 percent or less of the total.
Section 44AD for businesses
Resident individuals, HUFs and partnership firms (not LLPs) running an eligible business can use 44AD. You declare 8 percent of cash turnover and 6 percent of digital turnover as income. The limit is Rs 2 crore, raised to Rs 3 crore if cash receipts are 5 percent or less.
Advance tax and filing
For AY 2026-27, ITR-4 requires its own eligibility conditions, including the Rs 50 lakh total-income ceiling; presumptive income can be reported in ITR-3 or ITR-5 when ITR-4 is unavailable. A lower profit does not create an identical audit rule for every scheme: check the relevant audit clause and prior section 44AD history. Tax Year 2026-27 return forms must be chosen for that new-law period.
This is an estimate under the new regime for general guidance and is not tax advice. It includes the section 156 rebate and marginal relief near Rs 12 lakh for a resident individual. Surcharge and your other income can change the result. Please confirm with a qualified professional.
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Frequently asked questions
What is the income percentage under 44ADA?
Professionals under 44ADA declare at least 50 percent of gross receipts as income. You can declare more if your actual profit is higher.
What is the 44ADA limit for FY 2026-27?
Gross receipts up to Rs 50 lakh, raised to Rs 75 lakh if cash receipts are 5 percent or less of total receipts.
How is income calculated under 44AD?
Businesses declare 8 percent of cash turnover and 6 percent of digital or bank turnover as income, within a limit of Rs 2 crore, or Rs 3 crore if cash receipts are 5 percent or less.
When is advance tax due under presumptive schemes?
The full advance tax is payable in a single instalment by 15 March of the financial year.
Which ITR form is used for presumptive income?
ITR-4 Sugam, for total income up to Rs 50 lakh under 44AD, 44ADA or 44AE.
Official reference: Income-tax Act, 2025 (as amended by the Finance Act, 2026), Income Tax Department.
Related free calculators: ITR forms for AY 2026-27, income tax late fee and interest calculator (Section 234).
Official source: Always confirm the latest 44ADA and 44AD provisions at incometax.gov.in.
The FY 2026-27 schemes are in section 58; 44AD/44ADA are the familiar earlier-law references. The income-tax estimate assumes a resident individual with only the displayed ordinary income; it is not the firm/LLP or HUF tax computation. The 6% receipt rule requires the prescribed qualifying payment modes and timing, and non-account-payee cheques/drafts count as cash for enhanced-limit tests.
Sources: Amended Act, sections 58, 156 and 202.