What is Section 44ADA?

Sectio 44ADA provides a scheme of presumptive taxation of income from profession mentioned u/s 44AA(1) of the Income Tax Act, 1961. The benefit under this section can be claimed only by the specified professionals whose annual gross reciepts are under Rs. 50 lakhs. In the budget 2023, this limit has been revised to Rs. 75 lakhs for F.Y. 2023-24 onwards. Such increase is with a condition that 95% of the reciepts must be though online mode.

Eligible Assessee

• Individual
• Hindu Undivided Family(HUF)
• Partnership firms other than LLP

Professionals Covered under this Section

Asseessees engaged in below mentioned professions are covered in section 44ADA

(i) Interior decoration
ii) Technical Consulting
iii) Engineering
iv) Accounting
v) Legal
vi) Medical
vii) Architecture
viii) Other professionals as mentioned below:

• Movie artists including a producer, editor, actor, director, music director, art director, dance director, cameraman, 
  singer, lyricist, story writer, screenplay or dialogue writer and costume designers.
• Authorised representative i.e a person who represents another person for a fee before a tribunal or any authority 
  constitued under any law. It does not include an employee of the person so represented or a person who is carrying on the profession of accountancy.
• any other notified professionals.

Income offered under this section:

Presumptive Income offered u/s 44ADA shall be 50% of the total grosss reciepts of the professional. However, the professional has full liberty to declare an income higher than 50% of the gross reciepts. However, no expenses are allowed from gross reciepts u/s 44ADA since it is assumed that 50% of gross reciepts cover all expenses.

Benefits of Sec 44ADA

(i)  Assessee is not required to maintain book of accounts u/s 44AA.
(ii) Assessee is not required to get their books of accounts audited u/s 44AB.