Answer

1. F

   Facts

   Section 58, Income-tax Act 2025 (old Sec 44ADA) is India's most valuable tax simplification for professionals. Declare 50% of gross receipts as income, the remaining 50% is automatically deemed to be all your expenses. No receipts required. No books needed. No CA audit needed. One condition: specified profession, receipts up to ₹75L, at least 95% through banking.

2. P

   Provisions and law

   • Sec 58 (old 44ADA(1))
   • Sec 58 (old 44ADA(2))
   • Sec 58 (old 44ADA(3))
3. A

   Analysis

   What the 50% covers: All business expenses, internet, mobile, rent (home office share), travel, software subscriptions, equipment depreciation, professional development, professional indemnity insurance, accountant fees, bank charges, ALL deemed to be covered in the 50% deduction. You get ₹50 of every ₹100 receipt automatically as expense. Your actual expenses are irrelevant under this scheme. The real tax math for professionals: Gross receipts ₹36L. Taxable under Sec 58 (old Sec 44ADA): ₹18L. Tax at slab: ₹18L income → tax approximately: ₹12,500 (5% on ₹2.5L-5L) + 20% × ₹8L = ₹1,72,500. Plus 4% cess = ₹1,79,400. TDS already deducted by clients at 10% on ₹36L = ₹3.6L. Refund of ₹3.6L − ₹1.79L = ₹1.81L. Most professional freelancers with < ₹50L receipts: pay ZERO additional tax, in fact, they get a refund of excess TDS.

4. C

   Conclusion

   1. 1Confirm profession is in specified list (legal, medical, engineer, architect, CA, technical, interior design, film, authorised rep)
   2. 2Confirm gross receipts ≤ ₹75L in the FY
   3. 3Confirm ≥ 95% of receipts are via banking/digital (not cash), for ₹75L threshold
   4. 4Compute: 50% of gross receipts = taxable income. Apply slab rates. Compare with old vs new regime.
   5. 5No books of accounts required. No tax audit required. No receipts of expenses needed.
   6. 6Advance tax: compute total tax on 50% income. Pay 100% by March 15 (not quarterly).

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