Section 44ADA (now Section 58) Freelancer Tax Calculator 2026

Yes. From 1 April 2026 the Income-tax Act, 1961 is replaced by the Income-tax Act, 2025, and the presumptive scheme for professionals that was Section 44ADA continues as section 58 of the new Act, with the same 50% deemed profit and the same ₹50 lakh / ₹75 lakh receipt limits. Returns and notices for tax year 2026-27 onward cite section 58; earlier years still cite 44ADA. This calculator applies the same rule under either name.

Section 44ADA is a simplified tax regime for specified professionals (software engineers, technical consultants, designers, doctors, lawyers, accountants) where only 50% of gross receipts is treated as taxable profit, with zero requirement to maintain accounting books.

The limit is ₹50 lakh of gross receipts in a financial year. It rises to ₹75 lakh if cash receipts are no more than 5% of the total, which in practice means being paid by bank transfer, UPI or another non-cash mode. From tax year 2026-27 the same limits sit in section 58 of the Income-tax Act, 2025.

Yes, on half of what you received, not a flat ₹25 lakh. Under Section 44ADA (section 58 of the Income-tax Act, 2025 from tax year 2026-27), 50% of your gross receipts is treated as your profit and taxed at slab rates. ₹50 lakh of receipts gives ₹25 lakh of taxable profit; ₹40 lakh gives ₹20 lakh. The other half is treated as your expenses, so no further business expense can be deducted. You may declare more than 50% if you actually earned more. The limit is ₹50 lakh, or ₹75 lakh if cash receipts are no more than 5% of the total.

No. The half that Section 44ADA sets aside is treated as your expenses and is not taxed at all. GST is a separate tax on your invoices, not on your profit. Once registered, you add GST to the full invoice value — 18% for most professional and technical services — collect it from the client and pay it to the government; it is not your income. Registration is compulsory once aggregate turnover crosses ₹20 lakh in a financial year, or ₹10 lakh if you supply from Manipur, Mizoram, Nagaland or Tripura. Services exported under a LUT are zero-rated, so no GST is charged on them.

Section 44ADA puts your taxable profit at ₹25 lakh. For FY 2026-27, including 4% cess, the new regime tax on that is ₹3,43,200. The old regime charges ₹5,85,000 with no deductions, or ₹5,38,200 if you claim the full ₹1.5 lakh under Section 80C — so the new regime is ₹1,95,000 cheaper even after that claim. The standard deduction does not apply, because this is professional income, not salary. The calculator above shows the tax under both regimes for your own figures.

Yes, but unlike regular businesses that pay in 4 quarterly installments, Section 44ADA professionals only need to pay 100% of their advance tax in a single installment on or before 15th March.

You may declare less, but then Section 44ADA stops protecting you. Under Section 44AA you must maintain regular books of account, and under Section 44AB you need a tax audit by a chartered accountant — the audit trigger applies where you declare below the presumptive rate and your total income crosses the basic exemption limit. In practice, a freelancer with genuinely thin margins should budget for an audit; one with ordinary margins is usually better off declaring 50% and skipping both.

GST and income tax are separate systems, so Section 44ADA says nothing about it. Registration becomes compulsory once your aggregate turnover in a financial year crosses ₹20 lakh, or ₹10 lakh in the special category states. If you export services and are paid in foreign currency, that is a zero-rated supply, but you still register once you cross the threshold and file a LUT to export without paying tax. Any interstate supply of services is covered by the same turnover threshold.

Yes. An Indian client who is liable to deduct must withhold TDS under Section 194J at 10% on professional or technical fees once payments to you cross ₹30,000 in the year, and at 2% for certain technical services and call-centre work. Individuals and HUFs not under audit deduct at 5% under Section 194M above ₹50 lakh. That TDS is only an advance — check Form 26AS and AIS, claim it in your return, and expect a refund if your 44ADA income is taxed lower.

No, and this is the most common confusion. The five-year bar in Section 44AD(4) applies to businesses under Section 44AD, not to professionals under Section 44ADA. A doctor, lawyer, architect, engineer or technical consultant may use 44ADA in one year, declare actual profits with books the next, and go back to 44ADA the year after, as long as receipts stay within the limit and the audit rules are met in any year you declare less than 50%.