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Tax guide
Section 44ADA of the Income-tax Act, 1961 is now part of section 58 of the Income-tax Act, 2025. Here is what it does for freelancers in FY 2026-27 (AY 2027-28, 1 April 2026 to 31 March 2027), and the question nobody can settle for you: whether your work qualifies.
Section 44ADA of the Income-tax Act, 1961 is the presumptive taxation scheme for some professionals. The Income-tax Act, 2025, in force since 1 April 2026, renumbered these rules: 44AD, 44ADA and 44AE are grouped in section 58. We write 44ADA (section 58 of the Income-tax Act, 2025), because most people still search for 44ADA.
| Point | 44ADA (section 58 of the Income-tax Act, 2025) |
|---|---|
| Deemed income | 50% of your gross receipts. Declare 50% or more and books and audit are not imposed on you. |
| Receipts limit | ₹50 lakh, raised to ₹75 lakh if cash receipts are at most 5% of the total (that is, at least 95% through banking or digital channels). |
| Who can use it | Resident individuals, HUFs and partnership firms (not LLPs). |
| Advance tax | Reported as a single payment by 15 March if your tax due is above ₹10,000, instead of four instalments. |
These figures are reported for FY 2026-27 (AY 2027-28, 1 April 2026 to 31 March 2027). Sources say the substance carries over to section 58, but we could not confirm this on the official text.
This is not settled. 44ADA covers the professions referred to in 44AA(1) (section 62 of the 2025 Act): legal, medical, engineering, architecture, accountancy, technical consultancy, interior decoration, and professions notified by the CBDT. Some freelancers qualify through "technical consultancy" or a notified profession, others may not. We found no source that decides the question for developers, designers, writers or trainers.
Do not assume you are eligible. Ask a chartered accountant, with a description of what you actually do.
If you declare less than 50%, books of account (section 44AA, now section 62) and audit (section 44AB, now section 63) can apply. The exact conditions depend on your income: check with a chartered accountant.
ClearTax says there is no five year lock-in for 44ADA, unlike 44AD. Another source says section 58 of the 2025 Act introduces one. We could not settle this. Check it with a chartered accountant before you switch between methods.
The new regime (115BAC, section 202 of the 2025 Act) is the default. Reported slabs for FY 2026-27 (AY 2027-28, 1 April 2026 to 31 March 2027):
| Income (new regime) | Rate |
|---|---|
| Up to ₹4 lakh | Nil |
| ₹4 lakh to ₹8 lakh | 5% |
| ₹8 lakh to ₹12 lakh | 10% |
| ₹12 lakh to ₹16 lakh | 15% |
| ₹16 lakh to ₹20 lakh | 20% |
| ₹20 lakh to ₹24 lakh | 25% |
| Above ₹24 lakh | 30% |
A rebate under 87A (section 156 of the 2025 Act) of up to ₹60,000 is reported, which means no tax up to ₹12 lakh of taxable income under the new regime. The standard deduction is for salaried people and does not apply to freelancers. A 4% health and education cess is usually added, but we could not confirm it for FY 2026-27 on an open source. Surcharge rules are not covered here.
If you run a business rather than a profession, 44AD uses 8% of turnover, or 6% for banking and digital receipts, up to ₹2 crore (₹3 crore if cash is at most 5%). Professions in 44AA(1) cannot use it for that activity. Mixed income can be split between 44AD and 44ADA: ask a chartered accountant.
Compare 44ADA and actual income in the calculator See freelance jobs, free with an accountValid for FY 2026-27 (AY 2027-28, 1 April 2026 to 31 March 2027), checked on 9 November 2026. General information only, not tax or legal advice. These figures come from secondary sources such as ClearTax, Taxguru and Business Today: official pages could not be opened when we checked. Confirm your situation with a chartered accountant (CA) before you act.
Sources: ClearTax on section 44ADA, ClearTax old and new section numbers, Taxscan on section 58, Business Today on FY 2026-27 slabs, BankBazaar income tax slabs, Business Today on section 202.
What is section 44ADA?
It is the presumptive taxation scheme for some professionals in the Income-tax Act, 1961. In the Income-tax Act, 2025, the schemes of 44AD, 44ADA and 44AE are grouped in section 58. Under 44ADA (section 58 of the Income-tax Act, 2025), 50% of your gross receipts is treated as your taxable income.
What is the 44ADA limit for FY 2026-27?
Reported limits are ₹50 lakh of gross receipts, raised to ₹75 lakh if cash receipts are at most 5% of the total. We could not confirm on the official text that section 58 of the 2025 Act keeps them unchanged, so check before you rely on it.
Can a software developer, designer or writer use 44ADA?
This is not settled. Eligibility depends on whether your activity is one of the professions in 44AA(1) (section 62 of the 2025 Act) or a notified profession. We found no source that decides the question for developers, designers, writers or trainers. Ask a chartered accountant before you use 44ADA.
Can I claim expenses under 44ADA?
No separate expenses are deducted from the deemed 50%: they are treated as included in it. If your real expenses are above 50% of receipts, maintaining books and declaring actual income may give a lower tax. Compare both in our calculator.
Is 44ADA always cheaper?
No. It is simpler, but if your real expenses are higher than 50% of your receipts, the actual route can cost less tax. Our freelance tax calculator shows both.
What is the difference between 44AD and 44ADA?
44ADA is for specified professions and is 50% of receipts. 44AD is for businesses: it uses 8% of turnover, or 6% for banking and digital receipts, up to a limit of ₹2 crore, or ₹3 crore if cash is at most 5%. Professions in 44AA(1) cannot use 44AD for that activity. Both are grouped in section 58 of the 2025 Act.
