TL;DR for CAs
- Eligible professionals can declare 50% of gross receipts as income.
- Turnover threshold and cash receipt conditions matter.
- Books and audit may still be needed if opting out.
What it is
Section 44ADA offers presumptive taxation for specified professionals such as legal, medical, engineering, accountancy, and technical consultancy.
Who it applies to
Resident individuals, HUFs, and partnership firms (not LLPs) in eligible professions within the turnover limit.
Key provisions
- Deemed income = 50% of gross receipts
- Higher turnover limit if cash receipts are within specified %
- Advance tax implications
Practical tips for CAs
Map client profession to eligible list. Track digital vs cash receipts. Advise when books are still commercially useful.
Common mistakes
Applying 44ADA to ineligible professions; ignoring LLP exclusion; inconsistent year-to-year opt-outs.
For general guidance only. Verify with the latest Finance Act, GST notifications, and ICAI guidance notes before advising clients.