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Presumptive Taxation for Small Businesses & Traders

Section 44AD Presumptive Tax Calculator

Calculate your statutory deemed profit and total income tax under Section 44AD. No balance sheets, profit & loss statements, or mandatory CA audits required.

Turnover Breakdown (FY 2025-26)

UPI, Account Payee Cheque, NEFT/RTGS, Net Banking, Credit/Debit cards.

Physical cash receipts.

Total Gross Turnover: ₹62,00,000
Deemed Business Income
₹3,76,000
6% Profit on Digital (₹60L) ₹3,60,000
8% Profit on Cash (₹2L) ₹16,000
Cash % of Total Turnover 3.2% (Eligible for ₹3 Cr Limit)
Advance Tax Rule: Under 44AD, pay 100% advance tax in one single installment by 15th March 2026. No quarterly compliance needed.

Who is NOT Eligible for Section 44AD?

Ineligible Business Types
  • Limited Liability Partnerships (LLPs) and Companies
  • Persons earning commission or brokerage (e.g. real estate brokers)
  • Agency businesses
  • Goods transport operators (they are covered under Section 44AE instead)
Key Compliance Benefits
  • File simple ITR-4 (Sugam) instead of complex ITR-3
  • No requirement to maintain books of accounts under Section 44AA
  • No mandatory Tax Audit under Section 44AB
  • 1 single advance tax installment on 15 March

Frequently Asked Questions

What is the turnover limit for Section 44AD in FY 2025-26 & 2026-27?
The standard turnover limit is ₹2 Crores. However, if aggregate cash receipts do not exceed 5% of total turnover, the enhanced threshold limit is ₹3 Crores.
What are the deemed profit rates under Section 44AD?
The statutory minimum deemed profit rate is 6% for turnover received through digital modes (UPI, NEFT, RTGS, debit/credit cards, cheques) and 8% for turnover received in cash.
When is advance tax due under Section 44AD?
Taxpayers opting for Section 44AD presumptive scheme are exempt from quarterly advance tax installments. They only need to pay 100% of their advance tax in a single installment on or before 15th March of the financial year.
Can I declare higher profits than the 6% or 8% minimum threshold?
Yes. The 6% and 8% rates are minimum statutory floors. If your actual business profit is higher, you can and should voluntarily declare the higher net profit in your ITR-4 without triggering any tax audit.
What happens if I declare business profit lower than 6% or 8%?
If your actual profit is lower than the presumptive rate and total income exceeds the basic tax exemption limit, you must maintain formal books of account under Section 44AA and obtain a Tax Audit report under Section 44AB from a Chartered Accountant.
What is the 5-year lock-in restriction under Section 44AD(4)?
If an eligible taxpayer opts out of Section 44AD in any financial year after claiming it earlier, they cannot opt back into Section 44AD for the subsequent 5 consecutive assessment years and must undergo tax audit.
Are LLPs and private limited companies eligible for Section 44AD?
No. Section 44AD is exclusively available to resident individuals, Hindu Undivided Families (HUFs), and partnership firms (excluding Limited Liability Partnerships). Companies and LLPs are strictly ineligible.
Can professionals like doctors, lawyers, or engineers use Section 44AD?
No. Specified professionals cannot use Section 44AD; they are covered under Section 44ADA, which prescribes a 50% minimum deemed profit rate for gross receipts up to ₹50 Lakhs (or ₹75 Lakhs with 95% digital receipts).
Which ITR form is filed for Section 44AD presumptive income?
Taxpayers declaring income under Section 44AD file the simplified Form ITR-4 (Sugam). They do not need to prepare complex balance sheets or profit and loss accounts required in Form ITR-3.
Does this 44AD calculator store or transmit my turnover numbers?
No. All calculations regarding cash ratios, deemed net profits, and threshold compliance execute 100% locally in your client web browser. No financial data is transmitted or stored.