Freelancers & Influencers: Can You Really Show 50% Under 44ADA?
"Show 50% under 44ADA and forget about books" is advice that travels fast among freelancers and content creators. It is correct for some of them and wrong for many. This article looks at Section 44ADA for freelancers and influencers — who actually qualifies, what the listed professions mean, how influencer income should be classified, and what to do if you have already filed under the wrong section.
📑 Contents
- Quick Read
- Simple Explanation — Evening Chai Conversations
- Professional Deep-Dive
- Which law applies to which year
- The eligibility gate: a closed list of professions
- Exact meaning of each listed profession
- Freelancers — category by category
- Influencers — the classification problem
- Influencer income — stream by stream
- Showing 50% under the wrong section: safe or not?
- The reverse mistake: professionals using 44AD
- Revising the return
- Books, audit and advance tax
- Penalty and interest
- Open issues and awaited clarifications
- Action checklist
- Frequently Asked Questions
⚡ Quick Read
☕ Simple Explanation — Evening Chai Conversations
Evening. Tea on the front lawn. Vijay, a small trader, has his phone in one hand and a worried look. His daughter Hadhya, a CA student, is flipping through her notes.
Vijay: Hadhya, our neighbour's son Teja — the one who designs logos and posters for shops — says he pays tax on only half his income. He calls it "44ADA". He says there's no need to keep any accounts either. Is that true? Should I tell my nephew to do the same?
Hadhya: Appa, 44ADA is real, but it is not for everyone who works on their own. It is only for certain professions that the law names one by one. If your work is not on that list, you can't use it, however convenient it looks. Read more →
Vijay: Which professions?
Hadhya: Doctors, lawyers, chartered accountants, engineers, architects, interior decorators, technical consultants, IT professionals and company secretaries. Film artists too — actors, directors, cameramen, editors, singers and a few others working on a film.
Vijay: Teja uses a computer all day. Isn't that "IT"?
Hadhya: Using a computer doesn't make it an IT profession, Appa. A software developer writing code for a client, yes. A graphic designer making posters — that is creative work, not engineering or technology consulting. Teja doesn't fit the list. Read more →
Vijay: And your friend Tanvi, who posts cooking videos on Instagram? She told your amma she also shows 50%.
Hadhya: Influencing isn't on the list either. Her earnings from YouTube ads, brand promotions and memberships are generally treated as business income. For business, there is a different scheme — 44AD — where the minimum is 6% or 8% of receipts, not 50%. And her affiliate-link commissions can't go into either scheme; she has to compute actual profit for those. Read more →
Vijay: So nobody on Instagram can use 44ADA?
Hadhya: If Tanvi acts in a web series or a brand's ad film, that acting fee can fall under "film artist". But her own cooking reels don't automatically become films. Each income stream has to be looked at separately. Read more →
Vijay: Wait. If 44AD is only 6%, and Tanvi showed 50%, she paid more tax. How can that be wrong? The government got more money!
Hadhya: That's exactly what everyone says. Paying more doesn't make the return correct, Appa. It only means she is not in the danger zone — if her actual profit is 50% or less. But suppose she earned ₹30 lakh and spent only ₹6 lakh. Her real profit is ₹24 lakh, and she showed only ₹15 lakh under a section that doesn't apply to her. The 50% is protected only for people who are allowed to use 44ADA. For her, the officer can tax the real ₹24 lakh and add a penalty. Read more →
Vijay: And if her profit really was less than half?
Hadhya: Then there's no shortfall — she has simply paid more than she needed to. Either way, the fix is the same: revise the return under the correct section. Read more →
Vijay: Can she still revise? The return is already filed.
Hadhya: For last year's income, yes — up to 31 March 2027. Free until 31 December 2026, with a fee after that. But before switching to 44AD, she should know one thing: once you choose 44AD, you're expected to stay with it for five years. If you leave early, you're locked out for the next five. So it needs a proper look, not a quick click. Read more →
Vijay: (pouring another cup) So the rule is: check what your work actually is, not what your friend is doing.
Hadhya: Exactly, Appa. The section is decided by the work, not by the rate you like. Read more →
📘 Professional Deep-Dive
- Which law applies to which year
- The eligibility gate: a closed list of professions
- Exact meaning of each listed profession
- Freelancers — category by category
- Influencers — the classification problem
- Influencer income — stream by stream
- Showing 50% under the wrong section: safe or not?
- The reverse mistake: professionals using 44AD
- Revising the return
- Books, audit and advance tax
- Penalty and interest
- Open issues and awaited clarifications
- Action checklist
1. Which law applies to which year
Income earned in FY 2025-26 (AY 2026-27) is governed entirely by the Income-tax Act, 1961, including returns filed or revised after 1 April 2026. Income earned from 1 April 2026 (Tax Year 2026-27 onwards) is governed by the Income-tax Act, 2025, where Sections 44AD, 44ADA and 44AE are consolidated into a single table-based Section 58. The professional presumptive scheme sits at Serial No. 3 of that table.
| Subject | Income-tax Act, 1961 (up to FY 2025-26) | Income-tax Act, 2025 (Tax Year 2026-27 onwards) |
|---|---|---|
| Presumptive — business | Section 44AD | Section 58 (Table) |
| Presumptive — specified profession | Section 44ADA | Section 58 (Table, Sl. No. 3) |
| List of specified professions / books of account | Section 44AA(1), Rule 6F | Section 62(4), Rule 46 |
| Tax audit | Section 44AB | Section 63 |
| Revised return | Section 139(5) | Section 263(5) |
| Penalty for not maintaining books | Section 271A | Section 441 |
| Under-reporting / misreporting penalty | Section 270A | Section 439 |
| Interest (late return / advance tax) | Sections 234A, 234B, 234C | Sections 423, 424, 425 |
| Late-filing fee | Section 234F | Section 428 |
Under Section 58(11)(b) of the 2025 Act, the professional scheme is available to a "specified assessee" — an individual or a firm, other than an LLP, resident in India. The 50% rate and the receipt limits of ₹50 lakh (₹75 lakh where cash receipts do not exceed 5% of total receipts) are carried forward unchanged.
2. The eligibility gate: a closed list of professions
Section 44ADA applies only to a person "carrying on a profession referred to in sub-section (1) of section 44AA". Section 44AA(1) names legal, medical, engineering, architectural, accountancy, technical consultancy and interior decoration, and allows the CBDT to notify further professions. The notified additions are:
| Profession | Notification (1961 Act) | Position under 2025 Act |
|---|---|---|
| Authorised representative; Film artist | S.O. 17(E) dated 12-01-1977 (read with Rule 6F) | Not in Section 62(4)(a); listed only in Rule 46 — see open issues |
| Company secretary | S.O. 2675 dated 25-09-1992 | Named in Section 62(4)(a) |
| Information technology | S.O. 385(E) dated 04-05-2001 | Named in Section 62(4)(a) |
Under the 2025 Act, Section 62(4) reads: (a) legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, information technology or company secretary; or (b) any other profession as notified by the Board. The list is closed. If a profession is not on it, 44ADA / Section 58 Sl. No. 3 is not available, whatever the nature of the work, the invoice description or the TDS section the payer used.
None of the heads is defined in either Act. Their meaning therefore comes from ordinary usage, allied statutes and case law. The general test for "profession" is an occupation requiring intellectual skill or special learning, as distinct from trade or commerce: Dr. Devendra M. Surti v. State of Gujarat, AIR 1969 SC 63 : (1969) 1 SCR 235 (SC, decided 02-05-1968); see also CIT v. Manmohan Das (1966) 59 ITR 699 (SC) on the allied concept of "vocation".
3. Exact meaning of each listed profession
Engineering. The application of engineering knowledge to design, analyse, test, supervise or certify — civil and structural consultants, MEP designers, electrical, mechanical or electronics design engineers. India has no general licensing law for engineers, so a degree is not a statutory condition; the test is whether the work actually performed is engineering work. An engineering graduate who works as a content writer is not carrying on the engineering profession.
Architecture. The design of buildings and spaces, preparation of plans, and supervision of construction to those plans. In Council of Architecture v. Mukesh Goyal & Ors., Civil Appeal No. 1819 of 2020 (SC, 17-03-2020), the Supreme Court held that Section 37 of the Architects Act, 1972 prohibits unregistered persons only from using the title "architect"; it does not bar them from doing architectural work. For income-tax purposes, therefore, the activity decides the head — registration with the Council of Architecture is strong evidence, but not a precondition. A draftsman who only prepares drawings on someone else's instructions is a grey case.
Technical consultancy. The most litigated head, and the one freelancers most often try to fit into. It is undefined. The working test that emerges from tribunal decisions is that the service must involve applied scientific or technological knowledge — advice or solution-delivery that a layperson could not provide. In an order dated 23-07-2026, reported as 2026 TAXSCAN (ITAT) 1109, the Raipur Bench of the ITAT held that consultancy services requiring specialised technical skill and knowledge, which a layman cannot execute, fall within "technical consultancy" and are covered by Section 44ADA. Creative skill alone (design, writing, video content) or marketing skill alone is not technical consultancy.
Information technology. Notified under Section 44AA(1) by S.O. 385(E) dated 04-05-2001, and now named directly in Section 62(4)(a) of the 2025 Act. The term is not defined, but software development, IT consulting, cloud and DevOps work, data engineering, data science and machine-learning engineering fall comfortably within it.
Interior decoration. Designing interior spaces and supervising their execution. A person who mainly supplies furniture, fixtures or fit-out work is carrying on a business; only the design fee is professional receipts.
Company secretary. Under Notification S.O. 2675 dated 25-09-1992, a member of the Institute of Company Secretaries of India in practice within the meaning of Section 2(2) of the Company Secretaries Act, 1980. A CS in employment is not covered for his salary.
Film artist. Defined in Rule 6F (now Rule 46) as any person engaged in a professional capacity in the production of a cinematograph film, whether produced by him or by another person, as:
| # | Role | # | Role |
|---|---|---|---|
| 1 | Actor | 8 | Singer |
| 2 | Cameraman | 9 | Lyricist |
| 3 | Director, including assistant director | 10 | Story writer |
| 4 | Music director, including assistant | 11 | Screenplay writer |
| 5 | Art director, including assistant | 12 | Dialogue writer |
| 6 | Dance director, including assistant | 13 | Dress designer |
| 7 | Editor |
Three points are routinely missed. First, a producer is not in the list, even though several websites include producers. Second, dubbing and voice-over artists are not named. Third, the work must be in the production of a cinematograph film. Whether a YouTube video or an Instagram reel is a "cinematograph film" has not been tested before any court or tribunal; the literal definition is wide, but no one should assume that every reel is a film.
Authorised representative. A person who represents another, for a fee, before a tribunal or authority constituted under any law — excluding the represented person's employees, advocates and accountants.
Legal, medical and accountancy are the least contentious heads. Note that a doctor, lawyer or chartered accountant who also creates content earns two separate kinds of income: consultation fees (specified profession) and content income (not a specified profession). Only the first can go under 44ADA, and whether the second can use 44AD is contested — see Section 6.
4. Freelancers — category by category
| Freelance work | Likely head | 44ADA / Sec 58 Sl. 3? |
|---|---|---|
| Software developer, IT consultant, DevOps, data scientist, ML engineer | Information technology / technical consultancy | Yes |
| Web developer; UI/UX designer building the product | Information technology | Yes (pure visual design is grey) |
| Civil, structural, MEP or electrical design consultant | Engineering | Yes |
| Architect | Architecture | Yes |
| Interior designer (design fee) | Interior decoration | Yes |
| Technical writer (manuals, API documentation) | Arguably technical consultancy | Grey |
| SEO / digital-marketing / social-media manager | Majority view: not technical consultancy | Grey, leaning No |
| Management, HR or business consultant | Not "technical" | Generally No |
| Graphic designer, illustrator, animator (non-film) | Not listed | No |
| Content writer, copywriter, translator | Not listed | No |
| Tutor, coach, online course creator | Not listed | No |
| Photographer / videographer for weddings and events | Business | No |
| Editor or cameraman on a film or web series | Film artist | Yes under 1961 Act; open under 2025 Act |
| Anchor, emcee, event manager | Not listed | No |
| Virtual assistant, data entry | Business | No |
The TDS section a client uses has no bearing on eligibility. A client may deduct tax treating your fee as "professional services", but that definition is wider than the Section 44AA(1) list; it does not make you a specified professional.
5. Influencers — the classification problem
From AY 2025-26, the ITR utilities introduced code 16021 — "Social media influencers", placed under the "Profession" group. Because influencing is not a specified profession under Section 44AA(1) or Rule 6F, the code does not open 44ADA; and whether an influencer should be treated as carrying on business (44AD available) or a non-specified profession (neither scheme available) is not settled. A code in an ITR utility cannot amend the Act, and the CBDT has not issued any clarification. Selecting the code does not by itself decide which presumptive section, if any, applies.
| Characterisation | Presumptive route | Tax-audit threshold (1961 Act) |
|---|---|---|
| Business (dominant practical view) | Section 44AD — 6% of digital receipts / 8% of others; turnover up to ₹2 crore (₹3 crore where cash receipts ≤ 5%) | Section 44AB(a): ₹1 crore (₹10 crore where cash ≤ 5%) |
| Non-specified profession (implied by the code's placement) | None — actual income | Section 44AB(b): gross receipts above ₹50 lakh |
| Specified profession | Section 44ADA — only for a stream that genuinely fits, e.g. film artist | Section 44AB(b)/(d) |
Until the CBDT clarifies, the defensible approach is to treat content income as business income, apply 44AD where every stream qualifies, and keep books (ITR-3) where any stream is excluded or the creator wants to claim actual expenses.
6. Influencer income — stream by stream
| Income stream | Nature | 44ADA? | 44AD? |
|---|---|---|---|
| Platform ad-revenue share (YouTube Partner Programme, Instagram/Facebook bonuses) | Business receipts from exploiting own content | No | Yes (business view) |
| Paid promotions, sponsorships, brand integrations | Advertising service — not a listed profession | No | Yes (business view) |
| Acting in brand films, TV commercials, web series, OTT films | Film artist — actor | Yes (1961 Act); open under 2025 Act | No — and see the note below the table on the creator's other streams |
| Affiliate marketing (link commissions) | Commission income | No | No — Section 44AD(6)(ii) excludes commission |
| Barter — free products, sponsored stays | Business benefit, taxable at market value | No | Yes — include value in receipts |
| Memberships, Super Chats, fan gifting | Business receipts | No | Yes |
| Own merchandise, e-books, presets, templates | Trading / business | No | Yes |
| Paid courses, workshops, coaching | Education — not a listed profession | No | Yes (business view) |
| Event appearances, anchoring, hosting | Not a listed profession | No | Yes (business view) |
| Editing / shooting for another creator's channel | Business (literal "film" reading is untested) | Grey — generally No | Yes |
| Doctor / CA / lawyer / engineer — consultation fees | Specified profession | Yes | No |
| Same expert — content income | Business | No | Contested — see note below |
Can 44ADA and 44AD run side by side? The two readings of the law conflict here. Section 44AD(6)(i) excludes "a person carrying on profession as referred to in sub-section (1) of section 44AA" — the exclusion is worded against the person, not the income stream. On the literal (Revenue) reading, a doctor, CA or engineer who creates content, or an influencer who also earns as a film artist, cannot use 44AD for the business stream at all and must compute that stream on actual income. The contrary (assessee) reading is that the exclusion targets professional receipts only, so a separate business can still use 44AD. No court or tribunal ruling settles the point. The safe course for such a person is 44ADA for the professional stream and actual income, with books, for the business stream. Commission-type streams must always be computed on actual income.
7. Showing 50% under the wrong section: safe or not?
The most common response from a creator who has used 44ADA is: "I declared 50%. Under 44AD I would have declared only 6% or 8%. I've paid more tax — how can that be a problem?" The answer has two parts.
Where it holds. If the actual profit is 50% of receipts or less, declaring 50% creates no revenue loss. There is no under-reported income, and the wrong section by itself does not produce a tax demand. This is not a relief — the creator has simply paid more than the correct section required. It only shows that they are not in the danger zone.
Where it breaks. The 50% figure is safe only because the law presumes it for eligible persons. If 44ADA does not apply, that presumption disappears and the Assessing Officer is free to compute actual profit. Content creators often have high margins, and that is where the risk lies.
| Example: gross receipts ₹30,00,000, all digital | Case A: actual expenses ₹6,00,000 (profit 80%) | Case B: actual expenses ₹18,00,000 (profit 40%) |
|---|---|---|
| Declared under 44ADA (wrongly) | ₹15,00,000 | ₹15,00,000 |
| Actual profit | ₹24,00,000 | ₹12,00,000 |
| If 44ADA is rejected | Addition of ₹9,00,000; penalty of 50% of tax on it (200% if treated as misreporting) | No shortfall — excess tax already paid |
| Correct route if 44AD is available | Minimum ₹1,80,000 (6%), or a higher figure the creator chooses to declare | Minimum ₹1,80,000 (6%) |
| Verdict | Real exposure | Safe, but overpaid |
Section 44AD deems income at a minimum of 6% or 8% and allows the taxpayer to declare a higher figure. It does not require declaring actual profit, but the declared figure should be one the taxpayer can defend if receipts or bank credits are examined.
8. The reverse mistake: professionals using 44AD
The costlier error runs the other way. A software consultant, engineer or other specified professional who files under 44AD at 6% to save tax has under-reported. Section 44AD(6)(i) expressly bars a person carrying on a profession referred to in Section 44AA(1) from 44AD. On ₹30 lakh of receipts, the difference between 6% and 50% is ₹13.2 lakh of income — a clear under-reporting case with penalty exposure under Section 270A.
9. Revising the return
FY 2025-26 (AY 2026-27). The Finance Act, 2026 amended Section 139(5) with effect from 01-03-2026. A revised return can now be filed up to 31 March 2027, or before completion of assessment, whichever is earlier. Revision up to 31 December 2026 carries no fee; a revised return filed between 1 January and 31 March 2027 attracts a fee under Section 234I of ₹5,000, or ₹1,000 where total income does not exceed ₹5 lakh. For Tax Year 2026-27 onwards, the revised return is filed under Section 263(5) of the 2025 Act, with the same 12-month window. The original due date for non-audit ITR-3 and ITR-4 for this year was 31 August 2026.
Before revising from 44ADA to 44AD, check three things:
- Every stream must be 44AD-eligible. Commission and affiliate income must come out and be computed on actual income, which means ITR-3.
- The five-year lock-in under Section 44AD(4). Once 44AD is used, the creator must declare at least the presumptive rate for the next five years. Opting out means 44AD is unavailable for the following five years, and under Section 44AD(5) books and audit become mandatory where income exceeds the basic exemption limit. The same structure continues in Sections 58(7) and 58(8) of the 2025 Act.
- A downward revision can attract attention. Keep a short note on file describing each income stream and why it falls under 44AD.
Where a creator has any excluded stream or wants to claim actual expenses, revise to ITR-3 with income computed from books instead.
AY 2025-26 and earlier. The revision window has closed. An updated return under Section 139(8A) (Section 263(6) of the 2025 Act) can only increase tax, so it cannot recover tax overpaid through a 50% declaration. Where actual profit in an earlier year was above 50%, the updated return is the correct way to regularise it before the department acts.
10. Books, audit and advance tax
Books. A person correctly using 44AD or 44ADA at or above the presumptive rate is relieved from maintaining books for that business or profession. A person outside both schemes falls under Section 44AA(2): an individual must maintain books where income exceeds ₹2.5 lakh or turnover exceeds ₹25 lakh in any of the three preceding years. Using the wrong section does not remove that obligation. Under the 2025 Act, the corresponding provision is Section 62.
Tax audit. A specified professional under 44ADA who declares less than 50% with income above the exemption limit needs an audit under Section 44AB(d). If influencer income is treated as a non-specified profession, the audit threshold is ₹50 lakh of gross receipts under Section 44AB(b). Under the 2025 Act, audit is governed by Section 63.
Advance tax. Section 211(1)(b) allows 44AD and 44ADA taxpayers to pay the entire advance tax in one instalment by 15 March (Section 408 of the 2025 Act carries the instalment schedule). A person outside both schemes must follow the four-instalment schedule; otherwise interest under Section 234C (Section 425 of the 2025 Act) and Section 234B (Section 424) applies.
11. Penalty and interest
| Default | 1961 Act | 2025 Act | Consequence |
|---|---|---|---|
| Under-reporting / misreporting of income | Section 270A | Section 439 | 50% of tax on under-reported income; 200% for misreporting |
| Books not maintained where required | Section 271A | Section 441 | ₹25,000 |
| Tax audit not obtained where required | Section 271B | Fee under Section 428(c) (as substituted by the Finance Act, 2026 w.e.f. 01-04-2026) | 1961 Act: 0.5% of turnover or gross receipts, maximum ₹1.5 lakh. 2025 Act: fixed fee of ₹75,000 (delay up to one month), ₹1,50,000 thereafter |
| Late return | Section 234A (interest), 234F (fee) | Sections 423, 428(a) | 1% per month; ₹5,000 fee (₹1,000 where total income ≤ ₹5 lakh) |
| Advance tax shortfall / deferment | Sections 234B, 234C | Sections 424, 425 | 1% per month |
| Revised return after 31 December | Section 234I | Section 428(b) | Fee as noted in Section 9 |
| Wilful failure to file return | Section 276CC | Section 479 | Prosecution: 6 months to 7 years where tax sought to be evaded exceeds ₹25 lakh; 3 months to 2 years in other cases |
Immunity from the under-reporting penalty is available under Section 270AA (Section 440 of the 2025 Act) where the taxpayer accepts the assessment, pays the tax and interest within time and does not appeal — but not in misreporting cases.
12. Open issues and awaited clarifications
- Influencer code 16021. Whether its placement under "Profession" has any legal effect on classification. No CBDT clarification has been issued.
- Film artist and authorised representative under the 2025 Act. Section 62(4)(a) names IT and company secretary but not these two; they appear only in the Rule 46 books list. As on 30 September 2026, no CBDT notification under Section 62(4)(b) adding them to the specified-profession list has been issued. Until one is issued, film artists relying on the 50% scheme for Tax Year 2026-27 carry an interpretive risk.
- Film artist and authorised representative under the 1961 Act. A minority view holds that these two were only brought into Rule 6F for books, not notified under Section 44AA(1). The better view is otherwise: the CBDT notification of 12-01-1977 expressly notifies both professions for the purposes of Section 44AA(1), and the Income Tax Department's own FAQ lists both among specified professionals.
- Whether a reel or YouTube video is a "cinematograph film". Untested.
- Scope of "technical consultancy". Case-by-case; ITAT Raipur (July 2026) is the latest authority.
- Non-specified professionals and 44AD. The text suggests neither scheme applies; practice is mixed.
- Specified professional with a separate business. Whether Section 44AD(6)(i) bars the person entirely or only the professional stream. No ruling; see Section 6.
13. Action checklist
- List every income stream separately — do not classify the person, classify each receipt.
- Match each stream against the closed list in Section 2 using the meanings in Section 3.
- Specified profession streams: 44ADA at 50% (receipts up to ₹50 / ₹75 lakh).
- Business streams: 44AD at 6% / 8%, after considering the five-year lock-in.
- Commission, affiliate and non-specified profession streams: actual income, with books where thresholds apply (ITR-3).
- If you have already filed FY 2025-26 under the wrong section, revise before 31 December 2026 to avoid the fee; the last date is 31 March 2027.
- If actual profit was higher than declared in an earlier year, consider an updated return before the department raises it.
- From Tax Year 2026-27, apply Section 58 and Section 62(4) of the 2025 Act, and track the pending clarifications in Section 12.
Related reading: I Paid the TDS Default — Why Is TRACES Still Showing the Demand? (includes the 1961 Act to 2025 Act section mapping for TDS defaults).
Frequently Asked Questions
Can every freelancer use Section 44ADA and declare 50% of receipts?
No. Section 44ADA applies only to the professions listed in Section 44AA(1) and those notified by the CBDT: legal, medical, engineering, architecture, accountancy, technical consultancy, interior decoration, information technology, company secretary, film artist and authorised representative. Freelancers in other fields cannot use it.
Can social media influencers use Section 44ADA?
Generally no. Influencing is not a specified profession. Ad revenue, paid promotions and memberships are generally business income eligible for Section 44AD at 6% or 8%. Only a stream that genuinely fits a listed profession, such as acting in a film production, can use 44ADA.
I declared 50% under 44ADA, which is more than 44AD's 6–8%. Am I safe?
Only partly. If your actual profit is 50% or less, there is no shortfall and you have simply overpaid. If your actual profit is higher, the wrong section gives no protection and the officer can tax the actual profit with penalty. The fix is to revise under the correct section.
What is the last date to revise my return for FY 2025-26?
31 March 2027, or before completion of assessment, whichever is earlier. Revision up to 31 December 2026 is free; a fee under Section 234I applies to revisions filed between 1 January and 31 March 2027.
Is a software developer eligible for 44ADA?
Yes, in most cases. Software development and IT consulting fall within the information technology profession notified by S.O. 385(E) dated 04-05-2001, and within technical consultancy. Such a person must not use 44AD at 6% or 8%.
Does affiliate marketing income qualify for presumptive taxation?
No. Affiliate income is commission, which Section 44AD(6)(ii) excludes from 44AD, and it is not a specified profession for 44ADA. It must be computed on actual income and expenses.
What changes under the Income-tax Act, 2025?
From Tax Year 2026-27, Sections 44AD, 44ADA and 44AE are merged into Section 58, and the list of specified professions is in Section 62(4). The rates and limits are unchanged. Whether film artists remain eligible depends on a notification under Section 62(4)(b), which is awaited.
This article reflects the law as on the date of publication and is for general information. It is not a substitute for advice on specific facts. Provisions of the Income-tax Act, 1961 apply to FY 2025-26 (AY 2026-27); provisions of the Income-tax Act, 2025 apply from Tax Year 2026-27.
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