Presumptive tax 44ADA

No tax liability with rebate u/s, 87A IT act.

Thank you Sir for your reply

With ₹14 lakh professional receipts under Section 44ADA, your taxable professional income is ₹7 lakh. After adding ₹70,000 other income and deducting ₹1.68 lakh, your taxable income comes to about ₹6.02 lakh. Under the old tax regime, your total tax liability works out to approximately ₹34,216, before adjusting TDS, if any.

If your gross receipts are INR 14 lakh, income from other sources is INR 70,000, and you claim INR 1.68 lakh as a tax deduction (without expenses claimed), your total taxable income comes to around INR 13.02 lakh.

Under the new tax regime (NTR), the approximate taxable pay would be INR 1.04 lakh (including the cess).

The final tax must vary depending on the tax regime preferred and the eligible assumptions.

The rebate depends on the regime:

• Under Sec 44ADA, 50% of Rs 14 lakh = Rs 7 lakh of professional income. Add other income of Rs 70,000, so gross total income is Rs 7.70 lakh.

• New regime (default, FY 2025-26): Chapter VI-A deductions (Rs 1.68 lakh) are not allowed except 80CCD(2). Taxable income is Rs 7.70 lakh, below Rs 12 lakh, so the Sec 87A rebate (up to Rs 60,000) makes tax nil. No standard deduction for professional income.

• Old regime: taxable income is 7.70 − 1.68 = Rs 6.02 lakh. The rebate is available only up to Rs 5 lakh, so tax is about Rs 32,900 + cess (5% on 2.5–5 lakh = Rs 12,500, plus 20% on 5–6.02 lakh = Rs 20,400).

• So the new regime is clearly better here. With business or profession income, you can switch regimes only once after opting out (Form 10-IEA rules).

• 44ADA eligibility: receipts up to Rs 75 lakh if cash is 5% or less. Specified profession only. File ITR-4, and pay advance tax by 15 March (100%) under Sec 44ADA's single-instalment option if tax is payable.