44AD Presumptive Tax Calculator
Enter your business turnover to compare 44AD presumptive tax against maintaining regular books.
Runs entirely in your browser — your numbers never leave this page.
How it works
Small businesses get their own presumptive scheme — 44AD:
- Deemed profit: 8% of turnover (6% for receipts through banking/digital channels) — no books, no audit.
- Limit: Rs 2cr turnover (Rs 3cr if 95%+ receipts are digital).
- When it wins: real margins below 6–8% — typical for trading and thin-margin businesses.
- When books win: margins above 8%, or heavy genuine expenses to claim.
- Not for: commission/brokerage businesses, professionals (use 44ADA), companies and LLPs.
- Lock-in: opt out and you're barred 5 years + face audit — same discipline as 44ADA.
Frequently asked questions
What is 44AD?
Presumptive taxation for small businesses: 8% of turnover (6% for digital receipts) is deemed profit — no books or audit, up to Rs 2cr (Rs 3cr if 95%+ digital).
44AD vs 44ADA?
44AD is for businesses; 44ADA (50% of receipts) is for specified professionals. Different sections, different rates.
Who cannot use 44AD?
Commission agents, professionals, companies, LLPs, and businesses with turnover above the limit.
What counts as digital receipts?
Bank transfers, UPI, cards, net banking — anything through banking channels. Cash gets the 8% rate.
When do regular books win?
When your actual profit margin exceeds 6–8%, or you have large genuine expenses worth documenting.
Is there really a 5-year lock-in?
Yes — opting out of 44AD bars re-entry for 5 years and triggers mandatory audit. Don't flip-flop.
Do I still pay advance tax?
Yes — in one instalment by March 15, like 44ADA. Interest applies if missed.
Can I declare higher profit?
Yes — 8%/6% is the minimum deemed profit; you can declare more voluntarily.
Does 44AD affect GST?
No — GST registration and compliance apply independently of your income-tax scheme.
What records should I keep?
Minimal under 44AD, but keep sales records anyway — digital trails make this easy.