Presumptive tax calculator: section 44AD and 44ADA vs regular books
Enter a year’s receipts and real expenses and see the tax under presumptive taxation (section 58 of the Income-tax Act, 2025) against regular books, for tax year 2026-27. Free, no sign-up.
Presumptive or regular books?
Tax year 2026-27, new regime, resident individual with no other income. Enter a year’s receipts and real expenses.
Get the choice right before you file
We compare both routes on your real numbers, work out advance tax, and file the return. ITR for business and freelancers from ₹1,199.
Ask on WhatsAppAn estimate under the new regime, ignoring other income, deductions and marginal relief on surcharge. Tax includes 4% cess and the section 156 rebate for income up to ₹12 lakh. Nothing you enter leaves your browser unless you send it to us.
Quick answer
Under section 58 of the Income-tax Act, 2025 (formerly sections 44AD and 44ADA), a resident business with turnover up to ₹2 crore can declare 6% of digital receipts and 8% of cash receipts as profit, and a resident professional with receipts up to ₹50 lakh can declare 50%, with no detailed books. The limits rise to ₹3 crore and ₹75 lakh where cash receipts are within 5%. Presumptive tax wins when your real profit margin is above the deemed rate; regular books win when real expenses are high.
The two routes side by side
| Business (formerly 44AD) | Profession (formerly 44ADA) | |
|---|---|---|
| Who can use it | Resident individuals, HUFs and firms; not LLPs or companies | Resident individuals and firms in a listed profession; not LLPs, companies or non-residents |
| Receipts limit | ₹2 crore, or ₹3 crore if cash is within 5% | ₹50 lakh, or ₹75 lakh if cash is within 5% |
| Deemed profit | 6% of digital receipts, 8% of other receipts | 50% of gross receipts |
| Declaring less | Books and possibly an audit, and a five-year bar from the scheme | Books and a tax audit if income exceeds the basic exemption |
| Advance tax | Once, by 15 March | Once, by 15 March |
When regular books win
The deemed rate is a floor, not a ceiling: you can always declare more. Books win when real expenses push actual profit below it, for example a consultant with rent, salaried staff and software subscriptions spending more than half of receipts, or a trader on thin margins with heavy cash sales taxed at 8%. Before switching, cost the bookkeeping and, where it applies, the tax audit; see the tax audit limit guide.
Read more
The full rules are in our guides to section 44AD and section 44ADA. For the instalments, use the advance tax calculator; to have the return filed, see ITR for business and freelancers.
Frequently asked questions
What is presumptive taxation under the new Income-tax Act?
Section 58 of the Income-tax Act, 2025, which replaced sections 44AD and 44ADA from 1 April 2026, lets eligible small businesses declare 6% or 8% of turnover and professionals 50% of receipts as profit, without detailed books.
What is the turnover limit for presumptive tax in 2026-27?
₹2 crore for a business and ₹50 lakh for a profession, rising to ₹3 crore and ₹75 lakh where cash receipts are no more than 5% of the total.
Can I declare less than the presumptive rate?
Yes, by computing income from books. A business that opts out after using the scheme cannot return to it for five years and may need a tax audit; a professional declaring below 50% needs books and an audit if income is above the basic exemption.
Is presumptive income tax-free up to 12 lakh?
Under the new regime, a resident individual whose total income is ₹12 lakh or less pays no tax because of the section 156 rebate. Presumptive income counts towards that total like any other business income.
When is advance tax due on presumptive income?
In one instalment, by 15 March of the financial year. Paying later attracts interest.