It is meant to keep tax simple for small professionals. Under 44ADA you show at least half of your receipts as income; the rest is treated as your expenses.
Points to know:
- it applies to specified professions (technical consultancy, design and similar work often qualify)
- there is a yearly receipts limit, which is higher when almost all receipts come digitally
- TDS already deducted from your payments counts towards the tax you owe
Rules and limits change with each Budget, so confirm your case with your CA. Estimate it with the 44ADA calculator.
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Section 44ADA presumptive tax calculator
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Freelancer tax calculator (44ADA)
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