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For businessesRates reviewed September 2026

Presumptive Tax Calculator: 44AD, 44ADA and 44AE

This presumptive taxation calculator covers the three schemes small businesses and professionals actually use: 44AD for eligible businesses, 44ADA for specified professions and 44AE for goods carriages. It also flags the point at which a section 44AB tax audit becomes compulsory, which is the question that usually follows. The limits below apply to FY 2026-27 (tax year 2026-27) and are unchanged from FY 2025-26.

From 1 April 2026 the Income-tax Act, 2025 folded 44AD, 44ADA and 44AE of the 1961 Act into a single table-based section 58, and moved the tax audit requirement of section 44AB into section 63. The rates, the ceilings and the conditions carried forward without substantive change, so a business that was inside 44AD last year is inside section 58 this year on the same terms.

Two conditions do most of the work in practice. The higher ceilings of ₹3 crore and ₹75 lakh are available only where cash receipts stay within 5 percent of total receipts, and 44AD carries a five-year lock-in that pulls a taxpayer into audit if they step out early.

Presumptive Taxation Calculator

All three now sit in section 58 of the Income-tax Act, 2025.

₹

Including any cheque or draft that is not account payee. Stay within 5% for the higher ceiling.

%

Total tax payable

₹4,99,200

on presumptive income of ₹30,00,000

Schemesection 58 of the Income-tax Act, 2025
44ADA, specified profession
Gross receipts0% received in cash
₹60,00,000
Ceiling for the scheme
₹75 lakh (5% cash test met)
Scheme available
Yes
Presumptive rate50% of gross professional receipts
50%
Presumptive incomethe rate is a floor; a higher actual profit must be declared
₹30,00,000
Tax audit u/s 44ABnot required: the presumptive rate is declared and receipts are within the ceiling
Not required
Tax at new regime slabsno standard deduction against business income
₹4,80,000
Rebate u/s 87A
₹0
Surcharge and 4% cess
₹19,200
  • Limits are for FY 2026-27 (tax year 2026-27) and are unchanged from FY 2025-26.
  • 44AD carries a five-year lock-in: declaring lower profits within it bars the scheme for the next five years and pulls you into audit.
  • The ₹10 crore audit threshold also requires cash payments to be within 5%, which this calculator does not ask for.

The formula

Presumptive income = 8% of turnover (6% on non-cash receipts) for 44AD, 50% of gross receipts for 44ADA, or the prescribed per-vehicle amount for 44AE

Eligible business (44AD)
A resident individual, HUF or firm other than an LLP, excluding agency business, commission or brokerage and the professions covered by 44ADA.
Specified profession (44ADA)
Legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration and other notified professions.
5 percent cash test
Cash receipts, including a cheque or draft that is not account payee, must not exceed 5% of total receipts for the higher ceiling to apply.
44AB audit
Now section 63 of the Income-tax Act, 2025. It is triggered by turnover, by professional receipts, or by declaring income below the presumptive rate.

Declaring presumptive income means no further deduction for business expenses or depreciation, and the written down value of assets is still treated as if depreciation had been allowed.

How to calculate it

  1. 1

    Check eligibility for the scheme

    44AD is for a resident individual, HUF or partnership firm other than an LLP carrying on an eligible business. 44ADA is for a resident individual or firm other than an LLP in a specified profession. 44AE is for anyone other than a company who does not own more than 10 goods carriages at any time during the year.

  2. 2

    Apply the 5 percent cash test to find your ceiling

    Under 44AD the turnover ceiling is ₹2 crore, rising to ₹3 crore where cash receipts are within 5 percent of total turnover. Under 44ADA the ceiling is ₹50 lakh, rising to ₹75 lakh on the same condition. Cross the ceiling and the scheme is simply unavailable for that year.

  3. 3

    Compute the presumed income

    Under 44AD declare 8 percent of turnover, reduced to 6 percent on the part of turnover received by account payee cheque, bank draft, electronic clearing or another prescribed electronic mode by the due date for filing the return. Under 44ADA declare 50 percent of gross receipts. Under 44AE declare ₹1,000 per tonne of gross vehicle weight per month for a vehicle above 12 tonnes and ₹7,500 per month for any other goods carriage, counting part of a month as a full month.

  4. 4

    Declare a higher figure if your actual profit is higher

    The presumptive rates are floors, not caps. If the real profit exceeds the presumed figure, the higher amount must be declared. Declaring below the presumptive rate while claiming total income above the basic exemption limit takes you out of the scheme and into books and audit.

  5. 5

    Watch the 44AD five-year lock-in

    Once you declare under 44AD, you are expected to stay for the next five years. Declaring lower profits in any of those years bars you from 44AD for the five years that follow, and in each of those barred years you must keep books under 44AA and get them audited if your total income exceeds the basic exemption limit. Merely outgrowing the turnover ceiling does not trigger this; that is loss of eligibility, not opting out.

  6. 6

    Test whether a section 44AB audit is due

    Business turnover above ₹1 crore needs an audit, with the threshold rising to ₹10 crore where both cash receipts and cash payments are each within 5 percent of the respective totals. For a profession, gross receipts above ₹50 lakh need an audit. Audit is also due where a taxpayer is caught by the 44AD opting-out rule or declares below the 44ADA rate with income above the exemption limit.

Presumptive ceilings and audit thresholds for FY 2026-27 (tax year 2026-27)

Presumptive ceilings and audit thresholds for FY 2026-27 (tax year 2026-27)
ProvisionCeiling or triggerWhat applies
44AD, eligible business (now section 58)Turnover up to ₹2 crore, or ₹3 crore where cash receipts are within 5% of turnover8% of turnover, or 6% on turnover received through prescribed electronic modes
44ADA, specified profession (now section 58)Gross receipts up to ₹50 lakh, or ₹75 lakh where cash receipts are within 5% of receipts50% of gross receipts
44AE, goods carriages (now section 58)Not more than 10 goods vehicles owned at any time in the year₹1,000 per tonne of gross vehicle weight per month above 12 tonnes, ₹7,500 per month per other vehicle
44AB audit, business (now section 63)Turnover above ₹1 crore, or above ₹10 crore where cash receipts and cash payments are each within 5%Audit report with Form 3CD
44AB audit, profession (now section 63)Gross receipts above ₹50 lakhAudit report with Form 3CD

Worked example: consultant under 44ADA, FY 2026-27

Gross professional receipts
₹60,00,000
Receipts in cash
Nil, all through bank transfer
Regime
New regime (default)
Other income
Nil
  • Cash receipts are within 5% of gross receipts, so the 44ADA ceiling is ₹75,00,000 and receipts of ₹60,00,000 are inside it
  • Presumptive income = 50% of ₹60,00,000 = ₹30,00,000
  • No standard deduction is available against business or professional income
  • Slab tax on ₹30,00,000: ₹20,000 + ₹40,000 + ₹60,000 + ₹80,000 + ₹1,00,000 + ₹1,80,000 = ₹4,80,000
  • Cess at 4% on ₹4,80,000 = ₹19,200
  • No tax audit is required because the presumptive rate is declared and receipts are within the 44ADA ceiling

Total tax payable = ₹4,99,200

Frequently asked questions

The basic ceiling is ₹2 crore of turnover or gross receipts. It rises to ₹3 crore where cash receipts during the year do not exceed 5 percent of total turnover, which in practice means a business that collects almost everything through banking channels. Crossing the applicable ceiling makes the scheme unavailable for that year and normal computation applies.
It is the condition attached to the enhanced ceilings of ₹3 crore under 44AD and ₹75 lakh under 44ADA. Cash receipts in the year, including any cheque or bank draft that is not account payee, must not exceed 5 percent of total turnover or gross receipts. The same 5 percent idea appears in section 44AB for the ₹10 crore audit threshold, but there it must be satisfied on both receipts and payments.
Once a taxpayer declares income under 44AD, the expectation is that they continue for the next five tax years. If they declare lower profits in any of those years, they lose access to 44AD for the five years following that year. In each of those years they must maintain books under section 44AA and get a tax audit if total income exceeds the basic exemption limit.
For a business, when turnover exceeds ₹1 crore, or when it exceeds ₹10 crore where cash receipts and cash payments are each within 5 percent of the respective totals. For a profession, when gross receipts exceed ₹50 lakh. Audit is also compulsory where a taxpayer caught by the 44AD opting-out rule, or one declaring below the presumptive rate, has total income above the basic exemption limit.
Yes, if they are a resident individual or a partnership firm other than an LLP. Legal, medical, engineering, architectural, accountancy, technical consultancy and interior decoration are specified professions, along with the others notified for this purpose. Gross receipts must be within ₹50 lakh, or ₹75 lakh where cash receipts stay within 5 percent, and at least 50 percent of receipts must be declared as income.
Turnover is irrelevant. For a heavy goods vehicle with gross vehicle weight above 12 tonnes, income is ₹1,000 per tonne of gross vehicle weight for every month or part of a month the vehicle is owned. For any other goods carriage it is ₹7,500 per month or part of a month. The scheme is closed to anyone who owns more than 10 goods carriages at any point in the year, and to companies.
The structure changed, not the economics. From 1 April 2026 sections 44AD, 44ADA and 44AE of the 1961 Act are consolidated into a single table-based section 58, and the tax audit requirement of section 44AB sits in section 63. The 8, 6 and 50 percent rates, the ₹2 crore, ₹3 crore, ₹50 lakh and ₹75 lakh ceilings and the per-vehicle amounts carried forward.

Sources

Rates and rules on this page come from the following. This is a working aid, not professional advice: confirm anything material with your Chartered Accountant before you act on it.

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