Pay Zero Income Tax on Rs.24 Lakh: Tax Secret For Freelancers

Yogita | Last updated: 11 March 2026

Quick Summary

Freelancers and certain professionals in India can leverage Section 44ADA of the Income Tax Act for presumptive taxation. This allows them to declare only 50% of their gross receipts as taxable income, effectively treating the other 50% as expenses without needing to maintain detailed books of accounts. Under the new tax regime, if your taxable income is up to Rs. 12 Lakh, you can further offset the entire tax liability using a rebate, potentially bringing your final tax payable to zero.

Section 44ADA of the Income Tax Act allows certain professionals and freelancers (such as Software developers, Designers, Consultants, Engineers, Architects, Doctors, Lawyers, Chartered accountants, Technical professionals, Content creators / digital consultants) to use presumptive taxation.

Pay Zero Tax on Rs. 24 Lakh: Freelancer Tax Secret

If you choose to file income tax under presumptive taxation, the government automatically assumes 50% of their revenue is expenses, so only the remaining 50% is treated as taxable income without maintaining any books such as:

No Balance Sheet.
No Income or Expenditure.

So the rule becomes:

Taxable Income = 50% of Gross Receipts

Example:

Revenue	Expense	Taxable Income
24,00,000	12,00,000	12,00,000

Key Rules

You must be resident professional in India.
Gross receipts must be up to Rs.75 lakh for FY 2025-26. This limit is available if cash receipts is only 5% of the total receipts.
At least 50% income declared as profit.
If you declare profit less than 50% of your receipts then you must have to maintain books of accounts and may need to get them audited. Also if they exceed the limit of gross receipt, then they cannot opt for presumptive taxation.

New Tax Regime Rebate

Under the new tax regime, if taxable income is up to Rs.12L - you can completely offset the tax liability using rebate under Section 87A.

This means the final income tax payable can become Rs.0 if the taxable income stays within that rebate limit.

FAQ :

Presumptive taxation under Section 44ADA allows eligible professionals and freelancers to declare 50% of their gross receipts as taxable income, with the remaining 50% assumed as expenses.

Eligible individuals include resident professionals and freelancers in India such as software developers, designers, consultants, engineers, architects, doctors, lawyers, chartered accountants, technical professionals, and content creators.

For FY 2025-26, the gross receipts must be up to Rs. 75 lakh. This limit is applicable if cash receipts do not exceed 5% of total receipts.

By using presumptive taxation, Rs. 12 Lakh becomes taxable income. If this taxable income is within the rebate limit of Rs. 12 Lakh under the new tax regime (Section 87A), the final tax payable can be Rs. 0.

If profit declared is less than 50% of receipts, the individual must maintain books of accounts and may require an audit.

No, freelancers who exceed the gross receipt limit of Rs. 75 lakh for FY 2025-26 cannot opt for presumptive taxation under Section 44ADA.

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