# Presumptive Taxation — Section 44ADA

Section 44ADA is the presumptive scheme for specified professionals (the 44AD parallel for professions).

## Eligible Assessee

Resident Individual or Firm (not LLP)
Engaged in a notified profession (legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, etc.)

## Gross Receipt Limit

Gross receipts up to ₹50 lacs in P.Y.
Enhanced limit: ₹75 lacs, if cash receipts (incl. bearer/crossed cheque) ≤ 5% of gross receipts.

## Presumptive Income

50% of gross receipts — flat rate, irrespective of mode of receipt.

## Deductions

No further deduction of any expenditure under sections 30–38 or section 40(b).

## Books & Audit

Scenario	Books / Audit
Opts into 44ADA	Not required
Does not opt AND total income exceeds basic exemption limit	Required

## Other Points

Advance tax: One installment by 15th March of the P.Y.
ROI due date: 31st July
Unlike 44AD, there is no 5-year lock-in rule.

Worked example

### Example 1

Example 1 — Basic case: Dr. Suresh, a doctor, has gross receipts of ₹40 lacs. Presumptive income = ₹40 lacs × 50% = ₹20 lacs. No further expenses deductible.

### Example 2

Example 2 — Enhanced limit: CA Pooja has receipts of ₹65 lacs, of which ₹2 lacs (≈3%) is in cash. Since cash is ≤5%, the ₹75 lacs limit applies. Presumptive income = ₹65 lacs × 50% = ₹32.5 lacs.

### Example 3

Example 3 — Disqualification: Adv. Ramesh has receipts of ₹80 lacs. Even though only 1% is in cash, the cap is ₹75 lacs and so 44ADA does not apply.

### Example 4

Example 4 — LLP: A professional LLP cannot use 44ADA — LLPs are excluded.

⚠️ Common exam mistakes

Applying 44ADA to non-resident professionals — only RESIDENT individuals/firms qualify.
Allowing actual expenses or partner's remuneration as further deduction.
Allowing it to an LLP.
Confusing the ₹75 lacs limit threshold — it applies only if cash ≤5%.
Treating 44ADA receipts at 6%/8% (those rates are under 44AD).

Bare-Act text Section 44ADA · Income Tax Act, 1961 · click to expand

Section 44ADA provides that in the case of an eligible assessee, being a resident individual or a partnership firm (not being LLP), engaged in a notified profession whose gross receipts do not exceed ₹50 lakh (or ₹75 lakh where cash receipts do not exceed 5% of gross receipts), a sum equal to 50% of the gross receipts shall be deemed to be the profits and gains of such profession chargeable to tax under PGBP. No deduction under sections 30 to 38 shall be allowed.

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Presumptive Taxation — Section 44ADA (Professionals)

Worked example

⚠️ Common exam mistakes