Pay Tax on 50% of Your Income — File ITR-4 the Smart Way
Freelancers, consultants, and specified professionals earning up to ₹50 lakh can declare just half their gross receipts as income. No books to maintain. No audit. CA-assisted filing starts at ₹2,500.
File ITR-4 with a CA
Presumptive Taxation Scheme — Section 44ADA / 44AD
- CA-reviewed income computation
- ITR-4 filing with acknowledgement
- Business-hours CA support
- Advance tax guidance included
- Section 80 deduction optimisation
The Basics
What is Presumptive Taxation?
Under Section 44ADA, the government lets eligible professionals skip the hassle of detailed bookkeeping. Instead of calculating exact profits, you simply declare 50% of gross receipts as income. That's your taxable profit — done. Use ITR-4 (Sugam) to file.
Similarly, Section 44AD applies to small businesses with turnover up to ₹2 crore — presumed income is 8% of turnover (6% for digital receipts). If your proprietorship or partnership firm qualifies, this scheme simplifies your annual filings significantly.
You can still claim all Section 80 deductions (80C, 80D, 80G, etc.) on top of this presumption — further lowering your actual tax liability. Check our full list of income tax deductions to maximise your savings.
Eligibility
Who Can File Under Presumptive Tax?
Section 44ADA covers a wide range of professions notified by CBDT. If you earn from any of the following, you likely qualify.
File by Profession
Which Type of Professional Are You?
Every profession has its own income patterns and tax nuances. Pick your category — a TAXAJ CA will handle the rest, specific to your line of work.
- Brand collaboration fees
- Affiliate & referral commissions
- AdSense & platform payouts
- Gifted products (taxable value)
- OPD / consultation fees
- Visiting doctor charges
- Telemedicine platform income
- Medical report / certificate fees
- Retainer & appearance fees
- Legal drafting charges
- Arbitration / mediation income
- Corporate legal advisory
- Project-based coding income
- Upwork / Toptal / Fiverr earnings
- Foreign client USD payments
- SaaS / product royalty income
- Google AdSense payouts
- Brand sponsorship income
- Online course / digital product sales
- Membership & subscription revenue
- Design consultation fees
- Project management charges
- Site supervision income
- 3D rendering / drawing fees
- Client branding projects
- Freelance marketplace income
- Stock illustration royalties
- NFT / digital art sales
- Tuition & coaching fees
- Online course platform revenue
- Corporate training income
- Webinar / workshop charges
- Article / copywriting fees
- Blog AdSense & affiliate income
- Book / eBook royalties
- Ghost-writing project fees
- Tax & audit fees
- Bookkeeping retainer income
- Virtual CFO charges
- ROC / GST filing fees
- Project design / DPR fees
- Site inspection charges
- Technical report fees
- Retainer consulting income
- Fashion / lifestyle consulting
- Photographer / videographer
- Music / performing arts income
- Any other professional income
Our Process
How Filing Works with TAXAJ
From document upload to acknowledgement — typically done in 3–5 working days with a dedicated CA handling your return. You can also consult a CA online before purchasing if you're unsure which plan fits.
Purchase the plan
Select the Presumptive Tax Filing plan and complete payment online securely via Zoho Checkout.
Upload documents
Share your bank statements, gross receipt details, Form 26AS, and any investment proof via our secure portal.
Review computation
Your assigned CA prepares the income computation sheet and shares it with you for review before filing.
Return filed
ITR-4 is filed on the income tax portal and you receive the acknowledgement (ITR-V) on your email.
Documents Needed
What You Need to Share
Gather these before you begin — it speeds things up considerably.
Essential Documents
- Bank statements for the full financial year
- Gross receipts / income & expense summary
- Form 26AS Tax Credit Statement (from IT portal)
- PAN card & Aadhaar number
If Applicable
- Bank statement if interest income exceeds ₹10,000
- Investment proofs for Section 80C/80D deductions
- Home loan certificate (for Section 24 deduction)
- Salary slips (if you also have employment income)
Real Example
How Much Tax Can You Save?
Let's compare a freelance designer earning ₹40 lakh — with and without presumptive taxation.
* Figures based on FY 2024-25 tax slabs (old regime). 4% cess applicable. Sec 80 deductions can reduce tax further.
Why Choose Presumptive
Key Benefits of Section 44ADA
No Books to Maintain
Skip journals, ledgers, and cashbooks entirely. The scheme presumes your income — no documentation burden on you.
No Tax Audit Required
As long as your declared income is ≥ 50% of gross receipts and under ₹50 lakh, no Chartered Accountant audit is needed.
Significant Tax Savings
Declare only 50% of income. Combined with Section 80 deductions, you can dramatically reduce your effective tax rate.
Simpler ITR Form
File using ITR-4 — a much shorter and cleaner form compared to the 30+ page ITR-3 required under the regular method.
Advance Tax Simplified
Pay all advance tax in a single instalment by 15th March instead of four quarterly instalments — far less hassle.
Works for Foreign Income
Earning from foreign clients? As an Indian resident, you're taxable here. DTAA relief can be claimed to avoid double taxation. Also check Form 15CA-CB requirements for foreign remittances.
Compare
Presumptive vs Regular vs Audit
| Parameter | Section 44ADA (Presumptive) | Regular Filing (ITR-3) | If Income > ₹50L |
|---|---|---|---|
| Applicable turnover | Up to ₹50 lakh | Any turnover | Above ₹50 lakh |
| Taxable income basis | 50% of gross receipts | Actual profit (receipts − expenses) | Actual profit |
| Books of accounts | Not required ✓ | Required ✗ | Required ✗ |
| Tax audit under 44AB | Not required ✓ | May be required | Mandatory ✗ |
| ITR form | ITR-4 (simple) | ITR-3 (complex) | ITR-3 (complex) |
| Advance tax | Single instalment by 15 March | Four quarterly instalments | Four quarterly instalments |
| Sec 80 deductions | Fully claimable ✓ | Fully claimable ✓ | Fully claimable ✓ |
| Filing difficulty | Easy | Moderate–Complex | Complex + Audit |
Edge Cases
When Should You NOT Use Presumptive Tax?
Presumptive taxation is not always the best choice. Consider regular filing if:
- → Your actual expenses exceed 50% of gross receipts (your real taxable profit is less than the presumed 50%). In this case, opt for regular ITR-3 filing with books.
- → Gross receipts exceed ₹50 lakh — books and tax audit become mandatory under Sections 44AA and 44AB.
- → You have carried-forward losses to set off against current year income. Consult a CA online for the right strategy.
- → Your entity type is an LLP — LLPs are explicitly excluded from the presumptive scheme.
💡 Salary + Freelance Combo?
If you have a regular job and also freelance, you can still use presumptive taxation for the freelance portion. Your income clubbing looks like this:
Use ITR-4 to file both heads in a single return.
FAQ
Frequently Asked Questions
Ready to File Your Presumptive Tax Return?
Let a TAXAJ CA handle your ITR-4 from start to finish — computation, review, and filing in 3–5 working days.