Freelancer / Business Tax Estimator
Section 44ADA (presumptive 50%) for freelancers and 44AD (presumptive 8%/6%) for businesses can halve your effective tax. Compare both paths.
Your numbers
44ADA: doctors, lawyers, CAs, architects, IT consultants, writers, designers. 44AD: traders, retailers, manufacturers.
Your result
On ₹20 lakh gross with ₹4 lakh actual expenses: Regular regime treats your income as ₹16 lakh → tax ₹1.2 lakh. Presumptive 44ADA treats income as ₹10 lakh → tax ₹40,000. Presumptive saves you ₹80,000 this year and zero book-keeping headache.
- Presumptive: deemed income
- ₹10 lakh
- Presumptive: tax payable
- ₹40,000
- Regular: net income
- ₹16 lakh
- Regular: tax payable
- ₹1.2 lakh
- Presumptive saves
- ₹80,000
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If you have salary plus freelance income, run the regular Income Tax Calculator to compare regimes for the combined picture.
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Section 44ADA in plain English
44ADA applies to specified professionals (doctors, lawyers, CAs, architects, engineers, interior designers, accountants, technical consultants, film artistes, and a few others). If your gross receipts are under ₹75 lakh in a financial year, you can declare 50 percent of receipts as taxable income, period. The other 50 percent is treated as deemed expenses, regardless of your actual spending. No invoicing requirements, no GST trigger until ₹20 lakh, no audit, no book-keeping.
When regular beats presumptive
- Your actual business expenses exceed the deemed-expenses share (e.g. a designer with heavy software licence costs, or a videographer with equipment depreciation).
- You want to carry forward losses (presumptive does not allow loss carry-forward).
- You need to claim depreciation on assets (separate calculation; presumptive treats depreciation as included).
GST registration: the ₹20 lakh trigger
Once your gross receipts cross ₹20 lakh in a financial year (₹10 lakh for special-category states), GST registration becomes mandatory. Many freelancers ignore this, then discover it during ITR processing and face penalties + back-dated GST. Track your receipts cumulatively from April 1 each year.