Presumptive Taxation (44AD & 44ADA): Simpler Tax for Small Businesses & Professionals

The presumptive taxation scheme lets eligible small businesses and professionals declare income at a fixed rate of turnover — avoiding detailed bookkeeping and audits.

Section 44AD (businesses)

Eligible resident businesses with turnover up to ₹3 crore (where 95%+ receipts are digital) can declare 8% of turnover as income — or 6% for digital receipts.

Section 44ADA (professionals)

Professionals (legal, medical, engineering, consultancy, etc.) with gross receipts up to ₹75 lakh can declare 50% of receipts as income.

Key conditions

• No need to maintain detailed books or get a tax audit
• Advance tax payable in one instalment by 15 March
• If you opt out, a 5-year lock-in on re-entry applies

Is it right for you?

Presumptive taxation is ideal when real margins exceed the presumed rate. We run the numbers for you before you elect.