Section 44ADA of Income Tax Act means estimating the income of an assessee who is engaged in any profession referred in section 44AA(1).
Budget 2023 Update
Turnover limit has been increased from Rs 50 Lakh to Rs 75 Lakh for Professionals.
![](https://www.caclubindia.com/guide/wp-content/uploads/2024/08/Section-44ADA-1024x538.jpg)
Eligibility
Only individual, Partnership firm (other than LLP) who are resident.
Professional Persons Covered u/s 44ADA
- Advocates
- Bloggers
- Youtubers
- Engineers
- Chartered Accountants
- Architect
- Artist
- Doctors
- Interior Decorates
- Actors
Features of Section 44ADA of Income Tax Act
- Gross receipts should not exceed Rs 50 lakh or 75 Lakh.
- If Income is less than 50% of gross receipts then books of accounts need to be maintain.
- Once Section 44ADA of Income Tax Act opted, professionals can switch back to normal taxation in future years.
- Partnership firms availing this benefit cannot claim a deduction for partner’s remuneration.
- Assessee can claim deduction u/s 30-38 including unabsorbed depriciation and allowance.
- Eligible assessee should pay the advance tax by 15th March of the financial year.
Turnover limit
- Gross Receipt upto 50 Lakhs
- Rs. 75 lakhs if cash receipt upto 5% of total turnover
Computation of minimum profit
Income will be calculated at 50% of the total gross receipts of the profession.
![](https://www.caclubindia.com/guide/wp-content/uploads/2024/08/Profession-example.png)
What to do if the income is declared lower than 50%?
If income declared is lower, than tax audit is mandatory.
Related Articles
44AD of Income Tax Act – Click Here
Section 44AB of Income Tax Act – Click Here
Tax Audit Report – Click Here
FAQs
NRI cannot claim the benefit of this scheme.
Section 44AD: Applies to small businesses with a turnover up to Rs. 2 crore, excluding professional services.
Section 44ADA: Applies to specified professionals like doctors, lawyers, etc., with gross receipts up to ₹50 lakhs.