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Digital economy · Global Freelancing

Sec 58 (old 44ADA) for freelancers: 50% of gross income is deemed expense

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  1. Facts

    Under Sec 58, Income-tax Act 2025 (old Sec 44ADA), eligible professionals earning below ₹75L can declare 50% of gross receipts as taxable income, the other 50% is presumed to be expenses. No need to maintain detailed books or prove actual expenses.

  2. Provisions and law

    • IT Act, Sec 58 (old 44ADA) | Eligible professions, notified list

  3. Analysis

    Eligible under Sec 58 (old Sec 44ADA): Legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, authorised representative, film artist, company secretary, information technology. "Information technology" covers: Software development, IT consulting, data analytics, UI/UX design, app development, most tech freelancers qualify. Tax saving example: ₹30L annual freelance income. Under Sec 58 (old Sec 44ADA): taxable = ₹15L. Old regime tax on ₹15L (after standard deduction) ≈ ₹2.3L. Without Sec 58 (old Sec 44ADA), tax on ₹30L (with limited deductions) ≈ ₹6L+. Saving: ₹3.7L+.

  4. Conclusion

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Presumptive income tax return, ITR-4 (Sugam), Sec 58 (old 44AD, 44ADA, 44AE)

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