Presumptive tax for businesses and professionals
Under section 58 of the Income-tax Act, 2025, which replaces the old 44AD and 44ADA. See your presumptive income, limit and tax.
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How presumptive income is worked out
Under section 58, an eligible business declares at least 6% of receipts received through banks, UPI or cards and 8% of cash receipts as income. A specified professional declares at least 50% of gross receipts. No books of account are needed if you declare at these rates or higher.
Worked example
A trader with ₹40 lakh of digital receipts and ₹1 lakh in cash presumes income of ₹2,48,000 (6% of ₹40 lakh plus 8% of ₹1 lakh). Cash is under 5% of receipts, so the higher ₹3 crore limit applies.
Common questions
What replaced sections 44AD and 44ADA?
Section 58 of the Income-tax Act, 2025 covers presumptive taxation for small businesses, specified professionals and goods carriage operators from tax year 2026-27.
Who can use section 58?
Resident individuals, Hindu undivided families and partnership firms (not LLPs). Companies cannot use it.
What are the limits?
Businesses: ₹2 crore of turnover, or ₹3 crore if cash receipts are 5% or less. Professionals: ₹50 lakh of receipts, or ₹75 lakh if cash receipts are 5% or less.
How much income is presumed?
Businesses: 6% of digital receipts and 8% of cash receipts. Professionals: 50% of gross receipts. You may declare a higher figure.
Can I leave the scheme and come back?
If you opt out within five tax years of using it, you may not be able to use it again for the next five tax years.
For education only, based on your inputs and tax year 2026-27 rules. Tax shown is under the new regime and excludes surcharge on very high incomes. Not tax advice.