Section 44ADA of the Income-tax Act, 1961 provides a simplified tax system for professionals. The provision allows certain professionals to calculate and pay taxes on a presumptive basis, making it easier for them to comply with tax regulations. This simplified tax system applies to individuals and partnership firms engaged in various professions, including law, medicine, engineering, and architecture. It also extends to film artists, information technology specialists, and authorised representatives.
Under this scheme, professionals can declare their taxable income at a fixed rate of 50% of their gross receipts without deductions for expenses or depreciation. Till FY 2022-23, the threshold for eligibility under Section 44ADA is the gross receipt of Rs 50 lakh. From FY 2023-24, the threshold has been raised to Rs 75 lakh. The increased threshold limit is available if not more than 5% of the gross receipts is received in cash, and if it exceeds the threshold limit shall be Rs 50 lakh.
Source – https://economictimes.indiatimes.com
