44ADA vs. Books-of-Accounts Comparator
Presumptive taxation deems your profit at 50% of receipts. See exactly when that beats real books — and when it doesn't, once compliance cost is factored in.
This is a calculator, not tax advice. It estimates outcomes based on publicly available rules and typical provider pricing — it does not account for your specific circumstances. Rules and rates change. Verify anything you rely on with a qualified CA before you act on it. This tool models the audit-trigger and marginal-relief rules as generally understood, but tax law has genuine edge cases — treat every number here as a starting point for a conversation with your CA, not a filed return.
Foreign remittance through banking channels counts as non-cash — usually 0% for export-services consultants.
✓ Eligible for Section 44ADA. Within the ₹75L threshold (cash receipts ≤5% of gross receipts).
Your actual expenses are 16.0% of receipts. 44ADA deems them 50%. Under the new regime, you're better off under 44ADA by ₹1,82,000. You'd need actual expenses above 50% of receipts before books shows a lower raw tax bill — and above 51.3% before it's worthwhile after factoring in the extra compliance cost of maintaining books.
Tax by regime and route
| Regime | Route | Taxable income | Total tax | Audit? |
|---|---|---|---|---|
| New regime | 44ADALower tax | ₹12,50,000 | ₹52,000 | — |
| Books (actual) | ₹21,00,000 | ₹2,34,000 | Not required | |
| Old regime | 44ADALower tax | ₹11,00,000 | ₹1,48,200 | — |
| Books (actual) | ₹19,50,000 | ₹4,13,400 | Not required |
Deemed 44ADA profit: ₹12,50,000. Actual books profit: ₹21,00,000. Compliance cost (bookkeeping/audit/CA fees) is not included in the tax figures above — see the headline note for the after-compliance-cost comparison.
There is no five-year lock-in under 44ADA. That restriction applies to Section 44AD (businesses), not 44ADA (professionals) — a common error in other calculators. You can move between 44ADA and books year to year based on which is actually better for you that year.
How this is calculated
Section 44ADA lets specified professionals declare 50% of gross receipts as taxable profit, without maintaining detailed books or proving individual expenses. It applies up to ₹50 lakh in gross receipts — or ₹75 lakh if cash receipts are 5% or less of the total, which almost always holds for consultants paid by bank transfer or a payment platform for overseas work. Once opted in, no further deduction is allowed under Sections 28–43C — the 50% figure is final, though you may voluntarily declare a higher profit if your actual profit is higher.
This tool computes tax under four scenarios — 44ADA and books of accounts, each under both the old and new regimes — using the standard slab structure, the Section 87A rebate (including marginal relief, so a ₹1 increase in income near the rebate threshold can't cost more than ₹1 in extra tax), and 4% Health & Education Cess. Chapter VI-A deductions (80C and similar) apply only under the old regime, consistent with how the new regime actually works.
The audit trigger
Two separate rules can require a tax audit under the books route: gross receipts exceeding ₹50 lakh regardless of what profit you declare (Section 44AB(b)), or — more subtly — being 44ADA-eligible but declaring books profit below the 50% deemed rate while your income is still above the basic exemption limit (Section 44ADA(4)). This second trigger is easy to miss, since it only applies if you were eligible for 44ADA in the first place and chose not to use it.
Where a data gap remains
The slab rates used here are for FY 2025-26. Union Budgets can and do change these figures every year, and the current year's numbers have not yet been added to this tool — see the notice above the calculator. The 44ADA threshold and profit-rate structure itself is separate, more stable law and isn't affected by this gap.
Frequently asked questions
Is there really no five-year lock-in under 44ADA?
Correct — the five-year lock-in rule applies to Section 44AD (for businesses), not Section 44ADA (for specified professionals). This is one of the most common errors in other 44ADA calculators. You can choose 44ADA one year and books the next, based on whichever is actually better for you that year.
What's the actual threshold — ₹50 lakh or ₹75 lakh?
₹50 lakh is the base threshold. It rises to ₹75 lakh if your cash receipts don't exceed 5% of your total gross receipts. For an export-services consultant paid via bank transfer or a payment platform, receipts are almost always non-cash, so the ₹75 lakh threshold usually applies.
Why is the break-even expense ratio always exactly 50%?
44ADA deems your profit to be exactly 50% of gross receipts, regardless of your actual expenses. Since tax is computed on taxable income and rises (or stays flat) as taxable income rises, books shows a lower or equal raw tax bill exactly when your actual profit is lower than the deemed 50% — which happens exactly when your actual expenses exceed 50% of receipts. This is a direct mathematical consequence of the 50% deemed rate, not an approximation.
If books shows lower tax, is it automatically the better choice?
Not necessarily. Books of accounts means real bookkeeping, a possible mandatory audit, and typically higher CA fees — the doc's own estimate is ₹25,000–60,000/year in extra compliance cost. This calculator shows a second, higher break-even point that accounts for that cost, so a small tax saving under books doesn't get overstated.
Which specified professions qualify for 44ADA?
Section 44ADA covers a defined list of specified professions, including legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, and — relevant to most users of this tool — information technology and technical consultancy. If you're unsure whether your specific work qualifies, confirm with a CA.
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