If you’re a freelancer in IT, consulting, design, content writing, or any of the 50+ professions listed under Section 44ADA, you’re probably overpaying tax. Here’s how to fix that.
What is 44ADA?
Section 44ADA is a presumptive taxation scheme for professionals. You declare 50% of your gross receipts as taxable income — no need to maintain books, no audit, no expense receipts.
Eligible professions (notable ones):
- IT consulting, software development, web/app dev
- Architectural & engineering services
- Accounting, legal, medical consultation
- Interior decoration
- Authorised representatives, technical consultancy
- Film artists
Eligibility limit (FY 2025-26): Gross receipts up to ₹75 lakh, if at least 95% of receipts are via banking channels (UPI, bank transfer, cheque). Otherwise the limit is ₹50 lakh.
Worked example — ₹15 lakh income
A freelance developer earning ₹15 lakh in FY 2025-26:
| Regular ITR (ITR-3) | 44ADA (ITR-4) | |
|---|---|---|
| Gross receipts | 15,00,000 | 15,00,000 |
| Expenses claimed | 4,00,000 (with bills) | — |
| Taxable income | 11,00,000 | 7,50,000 (50% of 15L) |
| Tax (old regime, after 1.5L 80C) | ~1,32,000 | ~62,500 |
| Books / audit needed | Yes if profit < 50% | No |
Saving with 44ADA: roughly ₹70,000 per year, plus the time and stress of maintaining books.
When 44ADA is not the better option
- Your actual profit margin is below 50% (e.g. you have heavy equipment, sub-contractor or studio costs)
- You want to claim losses (44ADA assumes profit)
- You’re claiming home-loan interest under section 24 — that still works either way
What we need from you to file
- PAN and Aadhaar
- Bank statement for the full financial year (April–March)
- Any Form 16A or 26AS showing TDS deducted by clients
- Investment proofs — 80C (PPF, ELSS, LIC), 80D (mediclaim), home loan interest
- Any capital-gains statements (mutual funds, stocks)
Send your ITR to us — typical turnaround is 24 hours for salaried + simple business cases, 2–3 days for complex returns with capital gains.