Answer

1. F

   Facts

   Information technology is a notified profession for Sec 44AA, and IT work is also commonly treated as technical consultancy. Most practitioners accept Sec 44ADA for freelance software developers.

2. P

   Provisions and law

   • Sec 44ADA, Income-tax Act 1961 (now Sec 58, Income-tax Act 2025)Resident professionals with receipts up to ₹50 lakh (₹75 lakh if cash receipts are within 5%) can declare 50% of receipts as income
   • Sec 44AA, Income-tax Act 1961 (now Sec 62, Income-tax Act 2025)Books of account must be kept by professionals and businesses above the income or turnover limits
3. A

   Analysis

   Example: a developer with ₹40 lakh received through Upwork and direct foreign clients, all by bank, declares ₹20 lakh as income under Sec 44ADA. Under the new regime, tax on ₹20 lakh for AY 2026-27 is about ₹2 lakh before cess. Keep contracts and invoices that show the work is professional services, not sale of software products.

4. C

   Conclusion

   1. 1Keep contracts showing service nature
   2. 2Choose the IT or technical consultancy code
   3. 3Declare at least 50% of receipts
   4. 4File ITR-4 or ITR-3 by the due date

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.