FY 2025-26 (AY 2026-27) & Tax Year 2026-27
Artha Presumptive Tax Simulator
Authoritative deterministic calculation for Section 44AD (Small Business 6%/8%), Section 44ADA (Professionals 50%), single March 15 Advance Tax (Sec 211), and 234B/234C interest with Rule 119A mechanics. 100% in-browser client-side computation.
Core Presumptive Tax Thresholds & Deemed Rates
| Scheme | Eligible Taxpayers | Deemed Profit Rate | Standard Limit | Enhanced Limit (≤5% Cash) |
|---|---|---|---|---|
| Section 44AD | Resident Individuals, HUFs, Firms | 6% Non-Cash / 8% Cash | ₹2.00 Crores | ₹3.00 Crores |
| Section 44ADA | Specified Professionals u/s 44AA(1) | 50% Gross Receipts | ₹50.00 Lakhs | ₹75.00 Lakhs |
Frequently Asked Questions (Section 44AD & 44ADA)
What is Section 44AD presumptive taxation?
Section 44AD is a simplified direct tax scheme under the Income-tax Act, 1961 for eligible resident individuals, HUFs, and partnership firms carrying on eligible businesses. Under Section 44AD(1), taxpayers do not need to maintain formal books of accounts under Section 44AA or undergo tax audit under Section 44AB, provided they declare a minimum deemed profit of 6% on qualifying non-cash turnover and 8% on cash turnover.
Who is eligible to use Section 44AD and who is excluded?
Eligible assessees include Resident Individuals, Hindu Undivided Families (HUFs), and Resident Partnership Firms (excluding LLPs). Ineligible categories explicitly excluded under Section 44AD(6) include professionals carrying on specified professions u/s 44AA(1), persons earning income from commission or brokerage, persons carrying on agency businesses, and businesses operating goods carriages covered under Section 44AE.
What is the 5% cash receipt safe-harbor rule for Section 44AD and 44ADA?
Under the provisos to Section 44AD(1) and Section 44ADA(1) (introduced by Finance Act, 2023), if the aggregate of all cash receipts in the financial year does not exceed 5% of total gross receipts/turnover, the turnover threshold is enhanced: from ₹2 Crores to ₹3 Crores for Section 44AD (business), and from ₹50 Lakhs to ₹75 Lakhs for Section 44ADA (profession). Non-cash receipts include account-payee cheques, drafts, ECS, UPI, IMPS, NEFT, RTGS, and digital merchant card settlements.
What is Section 44ADA and who qualifies as a specified professional?
Section 44ADA is a presumptive tax scheme for resident professionals in notified professions under Section 44AA(1). Qualifying professions include Information Technology & Software Consultancy (CBDT Notification S.O. 385(E)), Legal, Medical & Healthcare, Accountancy & Audit, Engineering, Architecture, Company Secretary, and Interior Decoration. Assessees declare a minimum 50% deemed profit on total gross receipts.
What are the turnover and gross receipts limits for FY 2025-26?
For Section 44AD (Small Business), the standard turnover limit is ₹2.00 Crores, enhanced to ₹3.00 Crores if cash receipts ≤ 5.0%. For Section 44ADA (Specified Professionals), the standard gross receipts limit is ₹50.00 Lakhs, enhanced to ₹75.00 Lakhs if cash receipts ≤ 5.0%.
How is deemed presumptive profit calculated?
For Section 44AD: Deemed Profit = (Qualifying Non-Cash Turnover × 6%) + (Physical Cash Turnover × 8%). For Section 44ADA: Deemed Profit = Gross Receipts × 50%. In both schemes, the taxpayer has the statutory option to voluntarily declare a higher profit percentage.
When is advance tax due for presumptive taxpayers?
Under Section 211(1)(b) of the Income-tax Act, 1961, presumptive taxpayers under Section 44AD and 44ADA are exempt from standard quarterly advance tax installments. They are entitled to pay 100% of their advance tax in a single installment on or before 15th March of the financial year.
How are Section 234C and Section 234B interest penalties calculated?
Under Section 234C(1)(b), if advance tax paid by 15th March is less than 100% of assessed tax (less TDS), simple interest is charged at 1% for 1 month on the shortfall. Under Section 234B, if total advance tax paid by 31st March is less than 90% of assessed tax, simple interest is charged at 1% per month from 1st April of the assessment year until the date of payment.
How does Rule 119A apply to interest calculation on tax shortfalls?
Rule 119A of the Income-tax Rules, 1962 specifies that for calculating interest under Section 234B and 234C, any fraction of ₹100 in the principal tax base must be truncated (rounded down to the lower multiple of ₹100). For example, a shortfall of ₹42,780 is rounded down to ₹42,700 before applying the 1% interest rate.
Can a presumptive taxpayer choose between the New and Old Tax Regimes?
Yes. By default, taxpayers are assessed under the New Tax Regime under Section 115BAC (offering standard progressive slabs and a full rebate under Section 87A for taxable income up to ₹7 Lakhs). Taxpayers with business or professional income may opt for the Old Tax Regime by filing Form 10-IEA on or before the due date for filing return u/s 139(1).