Harun Raaj & AssociatesHarun Raaj & Associates

Claim audit · FY 2026-27

44ADA means 50% of your income is tax-free

Partly trueAudited: 2026-08-09

The condition that decides it

44ADA deems 50% as profit — it's a bookkeeping shortcut, not an exemption; you may declare more if you earned more. Only specified professionals qualify (gross receipts ≤ ₹75L with ≥95% digital receipts, else ₹50L). Social-media creators are generally NOT a specified profession.

What the department sees

26AS/AIS receipts vs declared gross, profession code in ITR

Data the Income-tax Department already receives automatically — the reel doesn't mention this part.

The real math

The reel treats 44ADA’s 50% deemed profit as a tax exemption. If eligible gross receipts are ₹40,00,000, the presumptive profit arithmetic is ₹40,00,000 × 50% = ₹20,00,000. That ₹20,00,000 is taxable professional profit before the applicable regime, slab and surcharge; the remaining ₹20,00,000 is not automatically a tax-free allowance. The taxpayer may declare more if actual profit is higher. Eligibility is limited to specified professionals, with ₹75 lakh receipts when at least 95% are digital and ₹50 lakh otherwise. A social-media creator is generally not a specified profession under current law. Section 44AB consequences must be checked if declaring lower profit. The taxpayer should retain invoices, receipts and the profession classification supporting the return. The statute produces a presumptive profit computation, not half-income exemption.

Questions people actually ask

Is 50% of 44ADA income tax-free?

44ADA deems 50% as profit; it does not exempt the other 50%. On ₹40 lakh receipts, ₹20 lakh is the presumptive profit before tax computation.

What is the 44ADA receipts limit?

₹75 lakh applies when at least 95% of receipts are digital; otherwise the limit is ₹50 lakh. Only specified professionals qualify.

Can a social-media creator use 44ADA?

44ADA is limited to specified professionals, and social-media creators are generally not a specified profession under current law. Confirm classification before filing.

Sections: 44ADA, 44AB · We audit claims, not creators. Reviewed by Harun Raaj & Associates, Chartered Accountants · All audited claims