44AD vs 44ADA

Section 44AD covers small businesses and section 44ADA covers specified professions. Both let you pay tax on a fixed share of your receipts instead of keeping full books. They apply to FY 2025-26 under the Income-tax Act, 1961. From tax year 2026-27 the Income-tax Act, 2025 carries both in section 58, as Table Sl. No. 1 for business and Table Sl. No. 3 for professions.

For a business the limit is turnover up to ₹2 crore, or ₹3 crore when cash receipts are 5% or less. The deemed profit is 6% of the turnover received by banking or online modes and 8% of the rest, or your actual profit if that is higher. For a profession the limit is gross receipts up to ₹50 lakh, or ₹75 lakh when cash is 5% or less, and the deemed profit is 50% of gross receipts, or your actual profit if that is higher.

The business row is for a resident individual, HUF or partnership firm other than an LLP, and it excludes commission, brokerage and agency business. The profession row is for a resident individual or a firm other than an LLP, and an HUF is not covered. The named professions are legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, information technology and company secretary work. Film artists and authorised representatives are also notified, under a 1977 notification that the 2025 Act carries forward. We have not located a newer notification.

If you declare at least the deemed profit, no tax audit applies. If you declare less and your total income is above the basic exemption, you must keep books of account and get a tax audit. Under the 2025 Act, declaring less in any of the next five tax years also bars you from the scheme for five years. The presumptive tax checker takes your kind of work, your receipts and your cash share, and returns the profit you would declare, the audit position, the ITR form and the due date.