Freelancer tax calculator · tax year 2026-27 · section 58 (old 44ADA)
Freelancer Tax Calculator FY 2026-27: Presumptive Tax (Old 44ADA, Now Section 58)
By Pratik Bajoria, Chartered Accountant & NISM-certified Research Analyst · Last reviewed 7 Oct 2026 by Pratik Bajoria, CA · Income-tax Act, 2025 as amended by the Finance Act, 2026
When freelancers ask me whether they need a CA to keep books, my first question is: how much do you really spend to earn? For most designers, developers and consultants, it's well under half of what they bill. That's why the presumptive scheme works so well for them.
From tax year 2026-27 the old section 44ADA sits in section 58 of the Income-tax Act, 2025. You declare 50% of gross receipts as profit if receipts are within ₹50 lakh, or ₹75 lakh when cash receipts are no more than 5%. This calculator applies new-regime slabs, the section 156 rebate with marginal relief and 4% cess. Surcharge (income above ₹50 lakh) isn't included.
Estimated new-regime tax incl. cess
₹0
Presumptive tax rules for professionals, tax year 2026-27
| Rule | Detail |
|---|---|
| Who | Resident individual or partnership firm (not an LLP) in a specified profession |
| Specified professions | Legal, medical, engineering, architecture, accountancy, technical consultancy, interior decoration, information technology, company secretary, or CBDT-notified (s.62(4)) |
| Receipts limit | ₹50 lakh; ₹75 lakh if cash receipts ≤ 5% of gross receipts (non-account-payee cheques count as cash) |
| Deemed profit | 50% of gross receipts, or actual profit if higher |
| Expenses / deductions | None allowed against presumptive income (s.58(4)); depreciation deemed claimed |
| Declaring less than 50% | Books and tax audit needed if income exceeds the basic exemption limit |
| Advance tax | Whole amount by 15 March (s.408(2)) |
Freelancer tax table: new regime, tax year 2026-27
| Gross receipts | Presumptive income (50%) | Tax | Effective on receipts | Tax if taxed on full receipts* |
|---|---|---|---|---|
| ₹12.00 lakh | ₹6.00 lakh | ₹0 | 0.0% | ₹0 |
| ₹20.00 lakh | ₹10.00 lakh | ₹0 | 0.0% | ₹2,08,000 |
| ₹24.00 lakh | ₹12.00 lakh | ₹0 | 0.0% | ₹3,12,000 |
| ₹30.00 lakh | ₹15.00 lakh | ₹1,09,200 | 3.6% | ₹4,99,200 |
| ₹36.00 lakh | ₹18.00 lakh | ₹1,66,400 | 4.6% | ₹6,86,400 |
| ₹50.00 lakh | ₹25.00 lakh | ₹3,43,200 | 6.9% | ₹11,23,200 |
| ₹75.00 lakh | ₹37.50 lakh | ₹7,33,200 | 9.8% | ₹19,03,200 |
*Comparison only — what tax would be if all receipts were profit; real books would deduct genuine expenses. ₹75 lakh requires cash receipts within 5%. Rebate under section 156: up to ₹60,000 when total income is within ₹12 lakh, with marginal relief just above.
The headline: receipts up to ₹24 lakh mean presumptive income of ₹12 lakh and ₹0 tax in the new regime, if you have no other income. Any interest or rent you add pushes total income above ₹12 lakh and the rebate fades quickly through marginal relief.
Worked example: ₹36 lakh of freelance receipts
Tax = new-regime slab tax on (50% × receipts + other income) − rebate/marginal relief, + 4% cess
A software consultant bills ₹36 lakh, all by bank transfer, and spends ₹4 lakh on a laptop, software and co-working. Presumptive income = ₹18,00,000. New-regime tax: 0 up to ₹4 lakh, 5% to ₹8 lakh, 10% to ₹12 lakh, 15% to ₹16 lakh and 20% on the last ₹2 lakh = ₹1,60,000 + 4% cess = ₹1,66,400 (4.6% of receipts). Take-home after expenses and tax ≈ ₹30,33,600. Advance tax of the whole amount is due by 15 March 2027.
Old regime vs new regime for freelancers
Presumptive income can be taxed under either regime. The new regime is the default and gives the ₹12 lakh rebate; the old regime only pays off if you have large deductions — for example PPF, ELSS or life insurance (the old 80C) and health insurance (the old 80D). Freelancers do not get the ₹75,000 salary standard deduction on professional income. Test both in the old vs new tax regime calculator (set salary income to “no”).
Freelance income is lumpy, so keep 6–12 months of expenses in an emergency fund before investing, and consider the NPS for retirement since you have no EPF.
GST and TDS: two things freelancers often miss
- Clients may deduct TDS on professional fees; it shows in your Form 26AS / AIS and is credited against your tax — the calculator's tax is before TDS credit.
- GST registration is a separate law with its own turnover thresholds and export rules; GST collected is not income.
- Foreign clients paying into your Indian account still count as gross receipts in rupees.
Educational estimate, not tax advice. Confirm eligibility, profession category and filing form with a Chartered Accountant.
The mistake that pushes freelancers out of the scheme
The 5% cash condition. A photographer billing ₹60 lakh who takes ₹4 lakh in cash from wedding clients is at about 6.7% cash. That puts them above the ₹50 lakh limit without the ₹75 lakh relief, so the scheme no longer applies. Ask clients to pay by UPI or bank transfer, and keep it that way all year, not just in March.
Frequently asked questions
What replaced section 44ADA in the Income-tax Act, 2025?
Section 58 of the Income-tax Act, 2025 (in force from 1 April 2026) carries forward presumptive taxation for professionals. Under its table (serial 3), a resident individual or firm (not an LLP) in a specified profession can declare 50% of gross receipts as profit — or more, if actual profit is higher — when gross receipts do not exceed ₹50 lakh, or ₹75 lakh if cash receipts are no more than 5% of gross receipts.
Who counts as a specified profession?
Section 62(4) lists legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, information technology and company secretary professions, plus any profession notified by the CBDT. Many freelance developers, designers in technical consultancy, doctors, lawyers and CAs fall here; pure traders and agents do not.
How much tax does a freelancer pay on ₹24 lakh of receipts?
Nothing, if that is the only income and you use the new regime. Presumptive income is 50% = ₹12 lakh, and the section 156 rebate (up to ₹60,000) wipes out the tax on total income up to ₹12 lakh. Above that, tax rises with marginal relief: on ₹36 lakh of receipts (₹18 lakh presumptive) tax is about ₹1,66,400 including cess.
Can I claim expenses or deductions under presumptive taxation?
No separate expense claim: section 58(4) says no loss, allowance or deduction is allowed against the presumptive income — the 50% already stands in for expenses and depreciation. You can declare higher profit, but if you want to declare lower than 50% you must keep books and get a tax audit when your income exceeds the basic exemption limit.
When do freelancers on presumptive tax pay advance tax?
In one instalment: section 408(2) requires the whole advance tax on presumptive income under section 58 to be paid on or before 15 March of the financial year. Anything paid by 31 March is also treated as advance tax.
Is presumptive taxation better than regular books for a freelancer?
It is simpler and usually better when your real expenses are well under 50% of receipts, which is typical for software, design and consulting freelancers. If your genuine costs exceed half your receipts — staff, studio rent, equipment — regular books may give lower tax.
Educational tool only — not investment, tax or legal advice. Figures are formula-based illustrations using the stated assumptions; actual outcomes depend on notified rates, rules and your specific facts. Verify with official sources or a qualified professional before acting. Findost (findost.io) and PaisaGuru by Findost are not affiliated with Findoc, FinDost, or other similarly named brands. PaisaGuru is the AI wealth concierge of Findost.