Freelancer Tax IndiaPresumptive taxation for freelancers: section 58
Section 58 of the Income-tax Act, 2025 lets small taxpayers declare a fixed share of their receipts as profit instead of keeping full books. The Table in section 58(2) has the cases that matter to freelancers (read on 13 November 2026).
Serial 3: a specified profession (the old section 44ADA)
- Who: an individual or a firm other than an LLP, resident in India, carrying on a specified profession (the list).
- Limit: gross receipts not above ₹50 lakh, or not above ₹75 lakh where cash receipts are not more than 5% of gross receipts.
- Income: 50% of gross receipts, or the profit actually earned if higher.
Serial 1: any other business (the old section 44AD)
- Who: an eligible assessee: a resident individual, HUF or firm other than an LLP that has not claimed certain deductions, does not carry on a specified profession, earns no commission or brokerage and runs no agency business.
- Limit: turnover not above ₹2 crore, or ₹3 crore where cash receipts are not above 5%.
- Income: 6% of the part received by a specified banking or online mode (in the tax year or before the return due date) plus 8% of the rest, or the profit actually earned if higher.
What the scheme does and does not allow
- No loss, allowance or deduction is allowed against the deemed income (section 58(4)); the written down value of assets is worked as if depreciation had been allowed (section 58(6)).
- If you declare less than the deemed profit and your income is above the exemption limit, you keep books (section 62) and get an audit (section 63) (section 58(3)).
- A cheque or bank draft that is not account payee counts as cash (section 58(9)).
Dates
An assessee under serial 1 or 3 pays the whole advance tax by 15 March (section 408(2)). The return is due on 31 July after the tax year for an assessee who is not a company, not audited and not in the 30 November group (section 263(1)(c)).
Examples
| Receipts | Deemed income, profession | Tax, new regime |
|---|---|---|
| ₹10,00,000 | ₹5,00,000 | ₹0 |
| ₹20,00,000 | ₹10,00,000 | ₹0 |
| ₹30,00,000 | ₹15,00,000 | ₹1,09,200 |
| ₹40,00,000 | ₹20,00,000 | ₹2,08,000 |
| ₹50,00,000 | ₹25,00,000 | ₹3,43,200 |
| ₹75,00,000 | ₹37,50,000 | ₹7,33,200 |
Common questions
What happens if I leave the 6%/8% scheme?
Section 58(7): an eligible assessee under Table serial 1 who declares profit lower than the scheme for any of the five years after a year in which the scheme was used loses the benefit for five tax years, and must keep books and get an audit if income exceeds the exemption limit.
Does a cheque count as cash?
A cheque or bank draft that is not account payee counts as cash for the 5% test (section 58(9)).
Sources
- The Income-tax Act, 2025, as published in the Gazette of India Extraordinary: section 58 (presumptive taxation), section 62(4) (specified profession), section 263 (due date of the return) and section 408 (advance tax). The enacted text was read on 13 November 2026.
- Tax rates for the tax year 2026-27 and the rebate: the Tax Slabs section of this family, which is built from the Finance Bill 2026 memorandum and the Income Tax Department pages (see its own sources).
Rules read on 13 November 2026 from the Income-tax Act, 2025. This site is independent, not connected with the Income Tax Department, and gives information, not tax advice. Whether your work is a "specified profession" and which scheme suits you depend on your facts: ask a chartered accountant.