If you're a self-employed professional earning up to ₹24 lakh annually, you may be eligible to pay zero income tax under India’s simplified presumptive taxation scheme – Section 44ADA — especially when combined with the new tax regime.

Whether you're a lawyer, doctor, architect, accountant, or consultant, this tax strategy is built for you. Let's break down how this works and how you can take full advantage of it.

What Is Section 44ADA?

Section 44ADA of the Income Tax Act offers a presumptive taxation scheme for resident professionals with gross receipts up to ₹50 lakh (or ₹75 lakh in certain cases). This provision is aimed at reducing the compliance burden for small and medium professionals.

Instead of maintaining books and going through audits, you can declare 50% of your gross receipts as profit, and that’s your taxable income.

This scheme is available to:

Indian residents

Individuals or partnership firms (excluding LLPs)

Notified professions: lawyers, doctors, engineers, architects, accountants, IT professionals, consultants, nri consultants etc.

How Can a Professional Earning ₹24 Lakh Pay Zero Tax?

Let’s consider a professional with ₹24 lakh gross receipts in FY 2025–26 who opts for:

• Presumptive taxation under Section 44ADA
• New tax regime

Here’s what it looks like:

Outcome: The professional pays zero tax despite earning ₹24 lakh legally.

Section 44ADA Limits: ₹50 Lakh vs ₹75 Lakh Turnover

Thanks to Budget 2023 updates, the limit increases to ₹75 lakh if:

Cash receipts do not exceed 5% of your total turnover

That means if you mostly receive payments via bank, UPI, cards, or online, you're good to go up to ₹75 lakh

FAQs: Is the 50% Profit Presumption Always Acceptable?

Yes. Once you opt for Section 44ADA, the Income Tax Department accepts 50% of your turnover as profit — no questions asked.

Even if your actual profit is lower or you have higher expenses, the law allows you to declare only 50% as income.

But remember:
If your lifestyle or asset purchases are not aligned with the declared income, the tax department may question the source of funds, not the 50% presumptive income itself.

Who Should Opt for Section 44ADA?

Section 44ADA is ideal if you:

• Are a self-employed professional or small partnership firm
• Have annual receipts up to ₹50–75 lakh
• Prefer no audit, no bookkeeping
• Want to maximize tax savings under the new regime
• File returns quickly with minimal paperwork

Benefits of Section 44ADA for Professionals

• Zero tax up to ₹24 lakh income
• No books of accounts required
• No need for audit
• Simplified tax filing
• Works perfectly with the new tax regime
• Reduced compliance costs

Pro Tips for Professionals Using 44ADA

• Stick to digital payments to reach the ₹75 lakh limit.
• Keep basic invoices and receipts for your own safety.
• Avoid large unexplained cash investments.
• Think long term — once you opt out of 44ADA, you can’t opt back in for 5 years.

Final Word: The Best-Kept Tax Secret for Professionals in India

Section 44ADA is a game-changer. By combining it with the new tax regime, you can legally pay zero tax on ₹24 lakh income while skipping the headache of audits and bookkeeping. It’s perfect for India’s growing community of independent professionals.

Need Help With Section 44ADA Filing?

We at Dinesh Aarjav & Associates specialize in tax strategies for professionals — whether you're a doctor, lawyer, CA, architect, or consultant. From domestic filings to NRI taxation, let us help you file stress-free, save tax, and stay compliant.

Contact our expert team now | Visit: www.dineshaarjav.com