Section 44AD calculator: presumptive income at 6% and 8%

Updated 25 October 2026 · free, no login

Under section 44AD, now section 58 of the Income-tax Act, 2025 from tax year 2026-27, a shop declares 6% of turnover received digitally plus 8% of the rest as profit, or more if actual profit is higher. It applies up to ₹2 crore turnover, or ₹3 crore when cash receipts are 5% or less.

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Digital and cash turnover give the presumptive income

Turnover received by UPI, card, bank or account-payee cheque (₹)For the year, plus amounts received this way before the return due date.

Turnover received in cash or any other way (₹)Includes cheques that are not account-payee.

Your actual profit (₹, optional)If it is higher than the presumptive figure, the higher one is your income.

Result

Total turnover: ₹90,00,000
6% of digital receipts: ₹3,60,000
8% of the rest: ₹2,40,000
Presumptive income: ₹6,00,000
Cash share / limit: 33.33% / ₹2,00,00,000
Within the turnover limit?: Yes

Declare at least ₹6,00,000 (6.67% of turnover) as business income. Every ₹1 lakh received by UPI instead of cash lowers it by ₹2,000.

This tool does not compute your tax. The income above is added to your other income and taxed at the slab rates of the regime you choose. It also does not check the other conditions (resident individual, HUF or non-LLP firm; no commission, brokerage or agency income).

How to use it

Split your turnover. Total sales for the year in two parts: what came by UPI, card, bank transfer or account-payee cheque, and what came in cash or any other way.
Count late digital receipts. Udhaar collected by UPI or bank after 31 March but before the income-tax return due date still counts as digital for the 6% rate. Add it to the digital part.
Add your actual profit (optional). If you know your real profit and it is higher than the presumptive figure, enter it: the higher figure is the income you declare.
Read the result. 6% of digital receipts plus 8% of the rest gives your presumptive business income. The tool also checks the ₹2 crore or ₹3 crore turnover limit.

Presumptive income formula and limits

Item	Rule	Example
Digital receipts	6% (UPI, card, bank, account-payee cheque; in the year or before the return due date)	₹60,00,000 × 6% = ₹3,60,000
Cash and other receipts	8%	₹30,00,000 × 8% = ₹2,40,000
Presumptive income	Sum of the two, or actual profit if higher	₹6,00,000 on ₹90 lakh (6.67%)
Turnover limit	₹2 crore; ₹3 crore if cash receipts are 5% of turnover or less	₹90 lakh with 33% cash: ₹2 crore limit, eligible

Which section applies to which year?

Income of	Law	Section
FY 2025-26 and earlier	Income-tax Act, 1961	44AD
Tax year 2026-27 onwards	Income-tax Act, 2025	58(2), Table S. No. 1

The figures in the examples are illustrative. Read the full rules, who is excluded and the five-year exit trap in section 44AD (section 58) presumptive income for shop owners. Keep your digital and cash receipts separate through the year: see accepting UPI in a shop and cash transaction limits.

This tool does not compute your tax and does not check every eligibility condition. Confirm with your CA before filing.

Questions

What is 8% profit on turnover under section 44AD?

Under the presumptive scheme a small business declares 8% of turnover as profit, without keeping full books. The rate is 6% for turnover received by account-payee cheque, bank transfer, UPI, card or other electronic modes. So a shop with ₹60 lakh of digital and ₹30 lakh of cash sales declares at least ₹3.6 lakh + ₹2.4 lakh = ₹6 lakh.

Is section 44AD still there in 2026?

The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026. The same scheme is now in section 58 of the new Act (serial number 1 of its table) for tax year 2026-27 onwards, with the same ₹2 crore or ₹3 crore limit and the same 6% and 8% rates. For FY 2025-26, filed in 2026, section 44AD of the old Act applies.

What is the turnover limit for presumptive taxation?

₹2 crore of total turnover in the year. It goes up to ₹3 crore when cash receipts, including cheques that are not account-payee, are 5% of turnover or less.

Can I declare less than 6% or 8%?

Only by leaving the scheme: you then keep books of account and may need a tax audit. Leaving within five years of opting in also locks you out of the scheme for the following years. Talk to your CA before declaring a lower profit.

Can I deduct rent, salary or electricity from the 6% / 8% figure?

No. The presumptive income is treated as covering all business expenses, and depreciation is deemed to have been claimed. Only the income tax computation that follows (slabs, regime and eligible deductions outside the business) is separate.

Who cannot use section 44AD or section 58?

Companies and LLPs, non-residents, people in specified professions (they have a separate scheme) and anyone earning commission, brokerage or agency income. A mobile shop that earns recharge or SIM commission should check with its CA first.

Does this calculator work out my income tax?

No. It gives the presumptive business income only. That income is added to your other income and taxed at the slab rates of the regime you choose; your CA or the income-tax portal works out the tax.

Cash vs UPI ka hisaab apne aap: RichPOS free trial

RichPOS records the payment mode of every bill (cash, UPI, card or split), so your digital and cash turnover for the year is one report away, along with profit and loss and GST reports for your CA.

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