Presumptive Taxation: Section 44AD & 44ADA
Presumptive taxation schemes simplify compliance for small businesses and professionals by allowing them to declare a fixed percentage of turnover as income — eliminating the need for detailed books of accounts.
Section 44AD (Businesses)
Available to resident individuals, HUFs, and partnership firms (not LLPs) with turnover up to ₹3 crore (if cash transactions ≤ 5%). Declare 8% of turnover as income (6% for digital receipts).
Section 44ADA (Professionals)
Available to specified professionals (doctors, lawyers, CAs, engineers, architects, etc.) with gross receipts up to ₹75 lakh. Declare 50% of gross receipts as income.
When Regular Taxation is Better
If actual profits are below the presumptive rate, opt for regular taxation. But you must maintain books and get accounts audited if below the presumptive income.
Five-Year Lock-in
If you opt out of 44AD in a year, you cannot re-enter the scheme for the next 5 assessment years. Plan carefully before switching.
Advance Tax
Under presumptive scheme, all advance tax is due in a single instalment by 15th March. Missing this attracts interest under Section 234B/234C.
At Adeptix Global, our dedicated finance professionals work as an extension of your team — handling the heavy lifting so you can focus on client relationships and growth. Talk to our experts to learn how we can support your practice.
