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Section 44ADA Query - 75 Lakh Limit Clarification

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Spooderman

Software developer

46 Points Posted on 09 May 2025

Can I use Section 44ADA for gross receipts up to 75 lakhs if 100% of my payments are via bank transfers?

ClearTax states:

"The benefit of section 44ADA can be taken only by those specified professionals whose annual gross receipts are under Rs.50 lakh (This limit is Rs.75 lakh, provided 95% of the receipts are through recognised banking channels)."

My receipts will be around 60 lakhs this year, all through banking channels. Any documentation needed beyond bank statements and BIRC certificate to prove this? Any recent changes to this provision?

Thanks!

Replies (4)

Quick Summary

This discussion clarifies the eligibility for Section 44ADA, specifically regarding the increased gross receipt limit of Rs 75 lakh. It confirms that this higher limit is accessible if at least 95% of payments are received through recognised banking channels, with cash receipts not exceeding 5% of the total. The conversation also touches upon the documentation required, such as bank statements and invoices, and confirms that a minimum of 50% of gross receipts can be declared as income under this section.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121546 Points Posted on 09 May 2025

If total 60 lakhs are through banking channel, you are eligible for sec. 44ADA IT act.

Invoices with GST charges will also be required along with bank statement and payment acknowledgements.

Spooderman

Software developer

46 Points Posted on 12 May 2025

Thank you for clarifying! Just to be 100% certain - since my entire 60 lakhs (approx) will be through banking channels and I qualify for Section 44ADA:

I can declare 50% of gross receipts as income, which would be 30 lakhs in my case (50% of 60 lakhs), correct?

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121546 Points Posted on 12 May 2025

Yes, that is minimum as per the rule. You can declare even more than that.

Tax Garden

Tax Consultant

2080 Points Posted on 05 May 2026

Under Section 44ADA, the Rs 75 lakh threshold for FY 2026-27 applies only if at least 95% of your gross receipts come through banking channels (cash receipts cannot exceed 5% of total). If your total receipts cross Rs 75 lakh but you meet the banking condition, you can still opt for 44ADA. Above the threshold without meeting the banking condition, or if you want to declare less than 50% profit, a full audit under Section 44AB applies.