Section 44ADA · Presumptive taxation for professionals
Doctors, lawyers, freelancers — declare half, file easy.
- Receipts cap
- ₹75 lakh (5% cash test)
- Presumed income
- 50% of receipts
- Eligible
- Resident Indiv & Firm (not LLP)
- Profession
- Specified u/s 44AA(1)
In plain English
Resident professionals like doctors, lawyers, architects and consultants can simply treat 50% of their gross receipts as taxable income — no detailed books, no audit — as long as receipts stay within ₹75 lakh and cash collections are under 5%.
| Meaning | Number |
|---|---|
| Receipts cap | ₹75 lakh (5% cash test) |
| Presumed income | 50% of receipts |
Specified professions u/s 44AA(1) that qualify
- Legal
- Medical
- Engineering
- Architectural
- Accountancy
- Technical consultancy
- Interior decoration
- Film artist — Notified u/s 44AA
- Company secretary
- Authorised representative
- Information technology — Notified profession
What this section covers
Section 44ADA applies to resident individuals and partnership firms (not LLPs) carrying on a specified profession u/s 44AA — legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration and other notified professions. 50% of gross receipts is deemed to be professional income. The gross-receipts ceiling is ₹50 lakh, increased to ₹75 lakh if aggregate cash receipts do not exceed 5%. A taxpayer claiming income lower than 50% and whose total income exceeds the basic exemption limit must maintain books u/s 44AA and get them audited u/s 44AB.
The legal text
“Notwithstanding anything contained in sections 28 to 43C, in the case of an assessee, being a resident in India, who is engaged in a profession referred to in sub-section (1) of section 44AA… a sum equal to fifty per cent of the total gross receipts of the assessee in the previous year on account of such profession… shall be deemed to be the profits and gains of such profession chargeable to tax under the head ‘Profits and gains of business or profession’.”
Old Act vs New Act
| Aspect | Act, 1961 | Act, 2025 |
|---|---|---|
| Section | 44ADA | 59 |
| Topic | Presumptive taxation for professionals | |
| Verdict | Renumbered — thresholds retained | |
| Notes | Restated as Section 59 under the Income-tax Act, 2025. The 50% presumption, the ₹75 lakh enhanced threshold subject to the 5% cash-receipts cap, and the audit fallback are retained. | |
Common confusion
44ADA covers only specified professions u/s 44AA(1). Coaching, financial advisory or marketing consultancy not falling within those notified categories should use 44AD or normal computation.
Who should know this
Related sections
Based on the official Income-tax Act, 1961 and the published Income-tax Act, 2025 as available on the Income Tax Department website. Always verify against the published Act and consult a qualified professional.