Income Tax
Presumptive Tax Calculator
Under section 58 of the Income-tax Act, 2025 (old 44AD and 44ADA), a business declares 6% of bank and online receipts plus 8% of other receipts as income, and a professional declares 50% of gross receipts.
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Enter your receipts to see the calculation.
How this calculation works Examples, assumptions and sources
How presumptive income is worked out
How is presumptive income calculated?
A business declares 6% of bank and online receipts plus 8% of other receipts as income. A professional declares 50% of gross receipts.
Business: income = 6% × bank and online receipts + 8% × other receipts
Profession: income = 50% × gross receipts
You can declare a higher income if your actual profit is higher. The calculator shows the minimum presumptive income.
What are the turnover limits for 44AD and 44ADA?
A business can use the scheme up to ₹2 crore of turnover, and a professional up to ₹50 lakh of gross receipts. When cash receipts are 5% or less, the limits are ₹3 crore and ₹75 lakh.
| Scheme | Limit | Cash 5% or less |
|---|---|---|
| Business (old 44AD) | ₹2 crore | ₹3 crore |
| Profession (old 44ADA) | ₹50 lakh | ₹75 lakh |
Cash share is cash receipts ÷ gross receipts. At exactly 5% the higher limit still applies. Above the limit, the presumptive scheme is not available.
Worked example
A business has turnover of ₹ 2,50,00,000, of which ₹ 10,00,000 came in cash. It uses the new regime and has no other income.
| Particulars | Amount |
|---|---|
| Turnover | ₹ 2,50,00,000 |
| Cash receipts (4% of turnover) | ₹ 10,00,000 |
| Limit, as cash is 5% or less | ₹ 3,00,00,000 |
| 8% of cash receipts | ₹ 80,000 |
| 6% of bank and online receipts (₹ 2,40,00,000) | ₹ 14,40,000 |
| Presumptive income | ₹ 15,20,000 |
| Tax on income, new regime | ₹ 1,08,000 |
| Health & Education Cess (4%) | ₹ 4,320 |
| Total tax | ₹ 1,12,320 |
With ₹ 15,00,000 of cash the share would be 6%, the limit would fall to ₹ 2,00,00,000, and this business could not use the scheme.
A professional with ₹ 40,00,000 of receipts, all through the bank, has presumptive income of ₹ 20,00,000. New regime tax is ₹ 2,00,000 plus ₹ 8,000 cess, a total of ₹ 2,08,000.
Eligibility and edge cases
Business and professional schemes have different eligibility rules. The profession route is restricted to specified professions; choosing “profession” here does not establish that your work qualifies. This calculator assumes you are resident and have already checked the entity, activity and prior scheme-use restrictions with your accountant. It checks the receipts limit and cash share, not complete eligibility.
- The 5% cash condition. The ₹3 crore and ₹75 lakh limits need cash receipts of 5% or less of the total. Cash of 5.01% brings the limit back to ₹2 crore or ₹50 lakh.
- Cheques count as cash unless they are account payee cheques or drafts (section 58(9)).
- Late bank receipts. The 6% rate needs payment by banking or online mode during the tax year or before the return due date. Later receipts are taxed at 8%.
- Advance tax. Presumptive filers pay the whole advance tax by 15 March 2027, not in four instalments (section 408(2)).
- Near ₹12 lakh. New regime income up to ₹12 lakh pays no tax. Just above it, marginal relief limits tax to the income above ₹12 lakh.
Assumptions
- You are a resident, and the presumptive income is your only income.
- Old regime tax uses the below-60 slabs. Deductions and TDS are not included.
- Whether your profession is listed in section 62(4) is not checked.
- Goods carriages (section 58(2) Table serial 2) are not supported.
- The five-year lock-in in sections 58(7) and 58(8) is not checked.
- For decisions about your own tax, consult a Chartered Accountant.
Supported period
Tax year 2026-27, which runs from 1 April 2026 to 31 March 2027. Section 58(2) of the Income-tax Act, 2025 replaces sections 44AD and 44ADA of the 1961 Act, with the same rates and limits. The Finance Act, 2026 changed only section 58(11)(a)(i).
Earlier years fall under the 1961 Act and are not supported.
References
- Income-tax Act, 2025 (Gazette of India) Section 58(2) rates and limits, 58(9) cheques, 156 rebate, 202(1) new regime rates, 408(2) advance tax.
- Finance Act, 2026 (Gazette of India) First Schedule Part III old regime rates; section 3 surcharge and cess; section 40 change to section 58.
Related calculators
Common questions
Frequently asked questions
What is the presumptive income rate for a business under 44AD?
6% of receipts by banking or online mode and 8% of other receipts, including cash. The 6% rate needs payment by banking or online mode during the tax year or before the return due date. From tax year 2026-27, section 58(2) of the Income-tax Act, 2025 replaces section 44AD.
What is the presumptive income rate for professionals under 44ADA?
50% of gross receipts. You can declare a higher income if your actual profit is higher. From tax year 2026-27, section 58(2) of the Income-tax Act, 2025 replaces section 44ADA.
What are the turnover limits for presumptive taxation?
₹2 crore of turnover for a business and ₹50 lakh of gross receipts for a profession. The limits are ₹3 crore and ₹75 lakh when cash receipts are 5% or less of the total. At exactly 5% the higher limit still applies.
Do cheques count as cash receipts?
Yes, unless they are account payee cheques or drafts (section 58(9)).
When is advance tax due on presumptive income?
The whole amount is due by 15 March 2027 for tax year 2026-27, not in four instalments (section 408(2)).
These answers follow the sources listed in References. How Khatakit checks its rulesReport an error on GitHub