Tax Consultant
1627 Points
Posted on 10 July 2026
SECTION 44AD DOES NOT APPLY TO PROFESSIONALS - CRITICAL DISTINCTION
Section 44AD (presumptive taxation) is available ONLY for businesses - specifically traders, retailers, manufacturers, and those in the business of hiring goods carriages. It does NOT apply to professionals.
For professionals, the correct section is 44ADA:
Applicable to: Doctors, lawyers, engineers, architects, accountants, interior designers, technical consultants, film artists, and other specified professions listed under Section 44AA.
44ADA RULES (FY 2025-26 / AY 2026-27):
- Deemed income: 50% of gross professional receipts (i.e., you pay tax only on 50% of your total receipts)
- Turnover limit: Gross receipts must not exceed Rs 75 lakh (Rs 37.5 lakh if more than 5% of receipts are in cash)
- No books of accounts required if you opt for 44ADA
- No audit required if you opt for 44ADA (audit required only if you claim income lower than 50% AND total income exceeds basic exemption limit)
- Form: File ITR-4 (not ITR-1 or ITR-2) if using presumptive taxation
If someone filed ITR under 44AD for professional income, a defective return notice under Section 139(9) may be issued. The correct section must be used.
For a full guide on presumptive taxation for consultants and freelancers, deductions still allowed, and ITR-4 filing steps: [freelancer consultant income tax filing guide India AY 2026-27](https://taxgarden.in/blog/freelancer-consultant-income-tax-filing-guide-india-ay-2026-27)