Answer

ITR

Old or new regime for a professional: worked example

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  1. Facts

    Under Sec 44ADA, income is 50% of receipts, here ₹15 lakh. The new regime has lower slab rates but no 80C, 80D or self-occupied home loan deductions. With deductions of ₹3.75 lakh, the new regime is usually cheaper at this income.

  2. Provisions and law

    • Sec 44ADA (now Sec 58)Presumptive income of 50% of gross receipts for eligible professionals
    • Sec 115BAC (now Sec 202)New regime is the default; business filers opt out with Form 10-IEA by the Sec 139(1) due date
    • Sec 87A (now Sec 156)Rebate for resident individuals with total income within the limit

  3. Analysis

    Old regime: ₹15 lakh minus ₹3.75 lakh is ₹11.25 lakh; tax is ₹12,500 plus ₹1,00,000 plus ₹37,500, total ₹1,50,000, or ₹1,56,000 with cess. New regime on ₹15 lakh with AY 2026-27 slabs: ₹20,000 plus ₹40,000 plus ₹45,000, total ₹1,05,000, or ₹1,09,200 with cess. The new regime saves about ₹46,800, so Form 10-IEA is not worth filing here. With much larger deductions, the answer can change.

  4. Conclusion

    1. Work out income under Sec 44ADA.
    2. List deductions you can claim under the old regime.
    3. Compute tax both ways with cess.
    4. File Form 10-IEA only if the old regime is cheaper.

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