Section 44ADA Presumptive Taxation: Who Qualifies and What You Get
Learn how freelancers and professionals can simplify their taxes by paying tax on only 50% of their gross receipts.
This scheme is a simplified way for certain professionals to calculate their taxable income without needing to maintain complex books of account.
Who it's for
This is designed for freelancers and professionals whose gross receipts do not exceed ₹75 lakhs.
What you get
Instead of calculating every single expense, you can choose to pay tax on only 50% of your gross receipts. This 50% is treated as your deemed profit for tax purposes.
What it costs you
There is no monetary cost to use this scheme. To benefit from it, you simply need to select the correct tax return form, known as ITR-4, when you file.
The catch to know
If you choose to use this scheme, you cannot claim any additional business expenses to reduce your taxable income. The 50% deduction is the only deduction allowed for your business costs.
How to apply
- Ensure your annual gross receipts are within the eligible limit.
- Prepare your financial details for the year.
- File your tax return using the specific form designated for this scheme.
- Check the official portal for the current filing requirements.