Section 44ADA Eligibility and ₹75 Lakh Cash Condition
Reviewed by CA Nikhil Gupta · Last reviewed 5 August 2026
Section 58/legacy 44ADA is available to resident individuals and partnership firms other than LLPs in specified professions.
The ceiling is ₹75 lakh when cash receipts are no more than 5%; otherwise ₹50 lakh.
Legal or Computational Framework
Governing rule
Specified professions include legal, medical, engineering/architecture, accountancy, technical consultancy, interior decoration and notified professions. Deemed profit is 50% or a higher amount.
Correct calculation method
Confirm person, residence and profession; classify cash receipts; apply the ceiling; compare 50% deemed profit with actual profit and compliance cost.
Step-by-step workflow
- Confirm person, residence and profession.
- classify cash receipts.
- apply the ceiling.
- compare 50% deemed profit with actual profit and compliance cost.
- Reconcile the input with official statements and supporting records.
- Calculate both legal eligibility and final tax impact.
- Record the effective date and review trigger.
Worked example
A resident architect has receipts ₹68 lakh and cash ₹2 lakh, or 2.94%. The ₹75 lakh ceiling can apply and deemed profit is at least ₹34 lakh.
The example is an illustration, not a substitute for the taxpayer's facts. A change in status, period, payment mode, document, city, asset, relationship or scheme can change the result.
Why generic pages get this wrong
Search pages often state a rate or limit without identifying the governing base. The calculation must distinguish gross receipt from taxable profit, tax from TDS, a deduction from an exemption, salary from business income, and an accounting entry from the tax treatment.
Decision matrix
| Decision point | Required treatment |
|---|---|
| Legal year | Use the Act, rules and notification effective for the income or transaction period |
| Taxpayer category | Confirm residence, age, entity, employee/business status and regime |
| Calculation base | Use the statutory definition rather than CTC, net bank receipt or accounting label |
| Ceiling or rate | Apply actual-amount, percentage, shared, lifetime and gross-income limits in sequence |
| Documentation | Link every input to an invoice, statement, contract, certificate or official record |
| Final output | Show tax, surcharge, cess, interest and TDS/TCS credits separately |
Entity and topical coverage
This page is written around the entities and concepts search engines expect for the topic: 44ADA, section 58, specified profession, 50% profit. They are used only where relevant and are connected to the live calculator and knowledge hub rather than repeated mechanically.
Use the Tax Audit Applicability Checker — Section 44AB / Section 63 to work through the related inputs before acting.
What Generic Pages Miss
- Using 44ADA for an unlisted profession.
- Allowing LLP eligibility.
- Ignoring residence.
- Deducting expenses after 50%.
- Confusing ₹75 lakh eligibility with audit threshold.
Practical Documentation Checklist
- Professional qualification
- Receipt register
- Cash-percentage test
- Expense and profit comparison
- Audit file
- ITR eligibility
For the complete rules on this topic, see the core guide: Presumptive Taxation (44AD/44ADA) Under Income-tax Act 2025.
See the broader Income-tax Act 2025 study guide hub for related rules and calculators on this topic.
Finin2min Summary
Section 58/legacy 44ADA is available to resident individuals and partnership firms other than LLPs in specified professions. The ceiling is ₹75 lakh when cash receipts are no more than 5%; otherwise ₹50 lakh.
Finin2min rule: establish eligibility, calculate transparently, and preserve an audit trail.
Frequently Asked Questions
Source and review trail
Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.
- Primary category
- Income Tax
- Official starting point
- www.incometax.gov.in