Income Tax

Section 44ADA Eligibility and ₹75 Lakh Cash Condition

CA Nikhil Gupta·Aug 2026·7 min readIncome Tax

Section 58/legacy 44ADA is available to resident individuals and partnership firms other than LLPs in specified professions.

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

  1. Confirm person, residence and profession.
  2. classify cash receipts.
  3. apply the ceiling.
  4. compare 50% deemed profit with actual profit and compliance cost.
  5. Reconcile the input with official statements and supporting records.
  6. Calculate both legal eligibility and final tax impact.
  7. 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 pointRequired treatment
Legal yearUse the Act, rules and notification effective for the income or transaction period
Taxpayer categoryConfirm residence, age, entity, employee/business status and regime
Calculation baseUse the statutory definition rather than CTC, net bank receipt or accounting label
Ceiling or rateApply actual-amount, percentage, shared, lifetime and gross-income limits in sequence
DocumentationLink every input to an invoice, statement, contract, certificate or official record
Final outputShow 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.

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

Related Calculator
Income Tax Calculator
Open Calculator →

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

What is the direct answer for “44ADA eligibility 75 lakh limit”?
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.
Which law and tax period apply?
Specified professions include legal, medical, engineering/architecture, accountancy, technical consultancy, interior decoration and notified professions. Deemed profit is 50% or a higher amount. Tax Year 2026–27 uses the Income-tax Act, 2025; AY 2026–27 remains under the 1961 Act.
How should the amount be calculated?
Confirm person, residence and profession; classify cash receipts; apply the ceiling; compare 50% deemed profit with actual profit and compliance cost.
What does the worked example show?
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.
Which documents should be kept?
Keep professional qualification, receipt register, cash-percentage test, expense and profit comparison. The calculation should be reproducible from these records.
What is the most common mistake?
The most common errors are using 44ADA for an unlisted profession and allowing LLP eligibility.

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
Editorial review date
2026-08-02
Content status
Finin2min explanation; official source controls where facts, law, rates, forms or procedures can change.

Page source links