Prepared by Finin2min Editorial Desk · Rates and rules verified 5 October 2026
Is a freelance income of ₹X really better than a salary of ₹Y? Enter both, choose the tax route for freelance income, and see the take-home, the break-even freelance income and the day rate you need to match your job.
It computes your spendable income after tax and costs in two situations: as an employee (salary less tax and professional tax, plus the value of employer benefits) and as a freelancer (receipts less expenses, compliance cost, tax and the benefits you must pay for yourself). It then finds the break-even freelance receipts — the income at which freelancing leaves you exactly as well off as the job — and converts it into a day and hourly rate.
| Route | Eligibility | Taxable income |
|---|---|---|
| Section 44ADA (section 58, Income-tax Act 2025) | Specified professions (legal, medical, engineering, architecture, accountancy, technical consultancy, interior design, film, IT and similar); receipts up to ₹50 lakh, ₹75 lakh if cash is 5% or less | 50% of gross receipts; no further deductions or books needed |
| Section 44AD (section 58) | Eligible business, not a specified profession; turnover up to ₹2 crore, ₹3 crore if cash is 5% or less | 6% of digital receipts, 8% of other receipts |
| Actual books | Any freelancer; tax audit if receipts exceed ₹50 lakh, or if you declare lower income than the presumptive rate and your income is above the exemption limit | Receipts minus allowable expenses |
Under the new regime the freelancer has no standard deduction (that is for salary), but also a lower slab burden at moderate incomes because of the ₹12 lakh rebate. Business-income earners who move out of the new regime can come back only once, so choose carefully.
A freelancer needs a higher gross income than the salary to be better off, because the employee receives employer PF, gratuity, insurance, paid leave and job security. The break-even receipts shown here include your estimate of those benefits and the extra compliance cost. Use the old vs new regime calculator for a detailed salary-only comparison and the presumptive tax calculator for 44AD/44ADA rules.
Not necessarily. Under section 44ADA only 50% of receipts is taxable and no books are needed, so the effective rate can be lower than on a salary of the same size. But you lose the standard deduction and employer benefits, and you pay GST compliance costs above ₹20 lakh.
Those in the specified professions listed in the Income-tax Act (such as legal, medical, engineering, architecture, accountancy, technical consultancy, interior decoration, film and notified IT-related professions). Others generally use section 44AD or actual books.
When aggregate turnover from services exceeds ₹20 lakh in a financial year (₹10 lakh in special-category states). Registration is mandatory earlier for inter-state supplies of goods and in some other cases.
The new regime usually wins unless you have large 80C/80D/HRA deductions. The calculator can pick the better regime for each option automatically.
Use the break-even day rate in the results. It spreads the break-even annual receipts over the billable days you enter, which should be fewer than working days because of holidays, sales time and gaps.
Rates and rules shown here were checked against the sources above on 5 October 2026. Government notifications can change a rate or rule at short notice; always confirm on the official site before you invest, file or claim.
Educational estimate only. Tax, legal, financial or regulatory treatment depends on facts and the law applicable to the relevant period. Verify the current official source or obtain professional advice before acting.
Scope: Take-home comparison of salaried employment and freelance/professional income for a resident individual for Tax Year 2026-27.
The calculation engine was checked against an independently written reference implementation across 6,080 salary and freelance input combinations, and against published figures where the scheme publishes them. Review date: 5 October 2026.
Prepared by Finin2min Editorial Desk. Educational estimate only.
Background, worked examples and the rules behind these numbers.