50% of gross receipts deemed as profit. File ITR-4. No books of account needed.
Freelancers and professionals with gross receipts up to ₹75 lakh can use Section 44ADA presumptive taxation — 50% of receipts is deemed income. No need to maintain detailed books. File ITR-4. Deductions under Chapter VI-A (80C, 80D, NPS) still available under old regime.
50% of receipts
Presumptive income %
₹75 lakh
Turnover limit (banking mode)
₹50 lakh
Turnover limit (cash allowed)
No
Books of account required
ITR-4 (Sugam)
ITR form
Not applicable (44ADA)
5-year lock-in
Section 44ADA is available to resident individuals and partnership firms (not LLPs) engaged in specified professions under Section 44AA(1): legal, medical, engineering, architecture, accountancy (CAs, cost accountants), technical consultancy, interior decoration, film artists (directors, editors, cinematographers), company secretaries, and information technology. Freelance writers, content creators, and YouTubers are generally not covered and must use ITR-3 with regular books.
Under Section 44ADA, 50% of your gross professional receipts is deemed to be your taxable income. You cannot claim deductions for individual business expenses — the 50% is assumed to cover everything. If your actual profit is higher than 50%, you must declare the actual figure. If lower than 50%, you must either declare 50% or opt out of 44ADA and maintain regular books.
Although you cannot claim business expenses, Chapter VI-A deductions remain available under the old regime on top of the 44ADA income: 80C (PPF, ELSS, LIC, up to ₹1.5 lakh), 80D (health insurance), 80CCD(1B) (NPS, additional ₹50,000). Note: the standard deduction of ₹75,000 is for salaried individuals only — freelancers under 44ADA cannot claim it.
Unlike Section 44AD (for businesses), professionals under Section 44ADA can opt in and out of the presumptive scheme every year without restriction. Section 44AD has a 5-year lock-in: if you opt out in year 3, you cannot re-enter 44AD for 5 years. Section 44ADA has no such restriction.
The Section 44ADA turnover limit (₹50L or ₹75L) is for income tax purposes. GST registration is required separately when your turnover exceeds ₹20 lakh for intra-state services (₹10 lakh for special category states). If your clients are abroad (export of services), GST registration may be advisable even at lower turnover to claim refunds on input services.
This income type requires ITR-4
Filing the wrong form results in a defective return
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