Presumptive Taxation for Professionals
Under section 58 of the Income-tax Act 2025 (the old section 44ADA), half of your gross receipts is treated as profit. You do not need to keep detailed books or claim expenses one by one. It applies up to ₹50 lakh of receipts, or ₹75 lakh if 5% or less came in cash.
It covers listed professions: legal, medical, engineering, architecture, accountancy, technical consultancy, interior decoration, information technology, company secretaries and film artists. If your work is not on that list, for example many writers or video editors, the presumptive scheme for small businesses (the old 44AD, 6% of digital receipts) may fit instead. Ask a chartered accountant if unsure.
Example 1: ₹18 lakh of receipts means ₹9 lakh of profit. Under the new regime that is below ₹12 lakh, so tax is nil, and the TDS clients deducted is refunded when you file.
Example 2: ₹30 lakh of receipts means ₹15 lakh of profit and tax of about ₹1,09,200 under the new regime.
Advance Tax, TDS and GST
- TDS: clients deduct 10% on professional fees above ₹50,000 a year (section 393, earlier 194J), 2% for technical services. It is credited against your tax.
- Advance tax: if you owe ₹10,000 or more after TDS, presumptive taxpayers can pay it all by 15 March. Otherwise it is due on 15 June, 15 September, 15 December and 15 March.
- GST: registration is needed once service turnover crosses ₹20 lakh a year (₹10 lakh in some special category states). Exports of services are zero rated but still count.