Rules and rates last checked: 13 October 2026. They match the Income-tax Act, 2025 as amended by the Finance Act, 2026. Sources are listed at the end of this page.
Section 44ADA is now section 58
The Income-tax Act, 2025 came into force on 1 April 2026, so tax year 2026-27 is the first year under it. The presumptive scheme for professionals that people know as section 44ADA is now section 58(2), serial number 3 of its table. The Income Tax Department's section finder maps section 44ADA to section 58.
How the presumptive scheme works
Instead of adding up your business costs, you declare 50% of your gross receipts as your profit and pay tax on that. You can declare a higher profit if you really earned more. Your actual costs then make no difference to your tax.
The Act rounds your total income and the tax payable to the nearest ₹10, and the calculator does the same.
Who can use it
Section 58 is for a resident individual, or a firm that is not a limited liability partnership, in one of these professions (section 62(4)):
- legal, medical, engineering or architectural
- accountancy or technical consultancy
- interior decoration
- information technology
- company secretary
- any other profession the Central Board of Direct Taxes notifies
This calculator works out the tax for a resident individual. A firm is taxed differently.
Your gross receipts for the tax year must be ₹50,00,000 or less. The limit is ₹75,00,000 if the cash you receive is no more than 5% of your gross receipts. A cheque or bank draft that is not account payee counts as cash.
What you give up
- You cannot set losses, allowances or deductions against the presumptive profit (section 58(4)).
- If you claim that your real profit is lower than 50%, and your total income is above the amount that is not taxed, you must keep books of account and have them audited (section 58(3)). This calculator does not cover that case.
Tax rates for tax year 2026-27
The new tax regime (section 202) is the default. These are its rates:
| Total income | Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 to ₹8,00,000 | 5% |
| ₹8,00,001 to ₹12,00,000 | 10% |
| ₹12,00,001 to ₹16,00,000 | 15% |
| ₹16,00,001 to ₹20,00,000 | 20% |
| ₹20,00,001 to ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
A resident individual with total income up to ₹12,00,000 gets a rebate of up to ₹60,000, which wipes out the tax (section 156). Just above ₹12,00,000, marginal relief keeps the tax from being more than the income above ₹12,00,000. Between ₹50,00,000 and ₹1,00,00,000 there is a 10% surcharge, with similar marginal relief. Health and education cess of 4% is added to the tax and surcharge.
You can choose the old regime instead. With business or professional income you choose it, in the way the rules prescribe, by the due date for that year's return. Once chosen, it applies to later years too. You can switch back to the new regime only once, and after that you can't choose the old regime again while you have business or professional income (section 202(4)). This calculator uses the new regime.
Advance tax: one payment by 15 March
Other taxpayers pay advance tax in four instalments, by 15 June, 15 September, 15 December and 15 March (section 408(1)). Under the presumptive scheme you pay the whole amount on or before 15 March (section 408(2)). Advance tax is the tax for the year minus the TDS deducted from your receipts, and it is due only if that comes to ₹10,000 or more (sections 404 and 405). Advance tax paid by 31 March still counts for that financial year (section 408(3)).
Worked examples
₹20,00,000.00 of receipts. The taxable profit is ₹10,00,000.00. Tax at the slab rates is ₹40,000.00, and the rebate of ₹40,000.00 cancels it, so the tax for the year is ₹0.00.
₹24,60,000.00 of receipts. The profit of ₹12,30,000.00 is just over ₹12,00,000. Tax at the slab rates is ₹64,500.00, but marginal relief gives a rebate of ₹34,500.00, leaving ₹30,000.00. With cess of ₹1,200.00, the tax is ₹31,200.00.
₹30,00,000.00 of receipts. The profit is ₹15,00,000.00 and tax at the slab rates is ₹1,05,000.00, with no rebate at this level. Cess of ₹4,200.00 makes ₹1,09,200.00, which is 3.64% of receipts. If clients had already deducted ₹60,000.00 of TDS, the advance tax to pay by 15 March would be ₹49,200.00.
₹60,00,000.00 of receipts, with cash of 5% or less. This is over ₹50,00,000, so it fits only because cash is 5% or less. The profit is ₹30,00,000.00 and the tax for the year is ₹4,99,200.00. If more than 5% had come in cash, the scheme would not apply.
What this calculator assumes
- You are a resident individual and these receipts are your only income. Salary, interest, rent or capital gains would change the tax and the rebate.
- You use the new tax regime for tax year 2026-27.
- Receipts after tax are before your business costs, which come out of what is left.
- It does not cover GST, which is separate from income tax. The India GST calculator and the GST invoice guide do.
The result is an estimate for general information, not tax advice. A chartered accountant can check your own case.
Questions
Can a software developer use section 58?
Information technology is one of the professions named in section 62(4). The other conditions still apply: you must be a resident individual or a firm that is not an LLP, and your receipts must be within the limit.
Do I need to keep books under the presumptive scheme?
If you claim a profit below 50% of your receipts and your income is above the amount that is not taxed, you must keep books of account and have them audited (section 58(3)). Ask a chartered accountant what records your own case needs.
Why is my tax nil?
Receipts of up to ₹24,00,000 give a presumptive profit of up to ₹12,00,000, and in the new regime the section 156 rebate cancels the tax on that, if it is your only income.
How do I set my rate as a freelancer?
The freelance hourly rate calculator works out the rate you need for the income you want, after costs and time off.
Sources
- Income Tax Department: Income-tax Act, 2025, as amended by the Finance Act, 2026: sections 1, 58, 62(4), 156, 202, 404, 405, 408 and 516 (checked 13 October 2026)
- Income Tax Department: Tax Reference Tables as per the Income-tax Act, 2025: tax rates, surcharge and cess for tax year 2026-27
- Income Tax Department: provisions of the Income-tax Act, 1961 and the Income-tax Act, 2025: section 44ADA corresponds to section 58