Self-Employed Tax Calculator (Section 44AD & 44ADA)
Calculate your income tax as a sole proprietor, consultant, or small business owner in India. Compare presumptive taxation under Sections 44AD and 44ADA against regular accounting to minimize tax liability and audit compliance costs.
A small business with ₹50,00,000 turnover under Section 44AD has a deemed profit of ₹3,10,000 (6.2%), paying ₹0 tax under the New Regime with zero audit requirements.
Business Income & Presumptive Scheme
Compare Section 44AD (6%/8%) vs Section 44ADA (50%) and regular audited books.
Digital receipts are taxed at concessional 6% profit margin; cash receipts at 8%.
Salaries, office rent, vendor bills, marketing, software, and travel expenses.
Presumptive Tax Payable
₹0
Deemed Taxable Income: ₹2,79,000
Presumptive Income
₹2,79,000
6.2% deemed profit
Actual Book Profit
₹7,00,000
Turnover - Expenses
CA Audit Mandate
Exempt
No audit required
Optimal Regime
Old Regime
Lowest tax path
Key Compliance Relief:
- Complete exemption from maintaining formal books of accounts under Section 44AA.
- Exemption from mandatory chartered accountant tax audit under Section 44AB.
- Advance tax can be paid in a single 100% installment on or before 15th March instead of 4 quarterly installments.
Presumptive Tax
₹0
- What it is:
- An Indian tax calculator for self-employed professionals, traders, and small business owners.
- What it calculates:
- Presumptive deemed profit, regular accounting profit comparison, optimal tax regime, and tax audit applicability.
Key Assumptions
- Turnover thresholds respect enhanced limits for digital receipts (cash $le$ 5%).
- Business deemed profit is 6% digital / 8% cash u/s 44AD.
- Professional deemed profit is 50% u/s 44ADA.
How it works
Section 44AD for Businesses: Eligible small businesses with turnover up to ₹2 Crores (₹3 Crores if digital receipts $ge$ 95%) can declare deemed profit at 6% of digital turnover and 8% of cash turnover.
Section 44ADA for Professionals: Specified professionals with gross receipts up to ₹50 Lakhs (₹75 Lakhs if cash receipts $le$ 5%) can declare 50% of gross receipts as taxable net income.
No Books of Accounts: Opting for presumptive taxation exempts you from maintaining formal accounting ledgers under Section 44AA and undergoing chartered accountant tax audit under Section 44AB.
Tax Regime Choice: Self-employed individuals can calculate tax under the New Tax Regime (Section 115BAC) or Old Tax Regime (claiming 80C, 80D, home loan interest).
Formula
Presumptive Income = (Digital Turnover × 6%) + (Cash Turnover × 8%) [Sec 44AD] OR Gross Receipts × 50% [Sec 44ADA]
- Turnover
- = Gross annual business turnover or professional receipts
- 6% / 8%
- = Statutory deemed profit rate for businesses under Section 44AD
- 50%
- = Statutory deemed profit rate for professionals under Section 44ADA
Enhanced turnover limits (₹3 Cr for 44AD and ₹75 Lakhs for 44ADA) apply when aggregate cash receipts do not exceed 5% of total turnover.
Example calculation
₹50 Lakh Small Business Turnover (90% Digital / 10% Cash)
- Gross Annual Turnover
- ₹50,00,000
- Presumptive Deemed Profit Rate
- 6.2% (6% digital, 8% cash)
- Deemed Taxable Income u/s 44AD
- ₹3,10,000
- Tax Payable under New Regime
- ₹0
- Chartered Accountant Tax Audit
- 100% Exempt u/s 44AB
Frequently asked questions
What is the turnover limit for presumptive taxation under Section 44AD?
Can a self-employed professional opt for the New Tax Regime?
What if my actual business profit is lower than the presumptive percentage?
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Reviewed by Pradipta Ray, Editor · Updated