Glossary
Section 44ADA: presumptive income for doctors, now section 58 Which Act applies to which year, who qualifies, the ₹50 lakh and ₹75 lakh limits, and what the scheme takes away.
Most doctors know the scheme by its old number. The rule is the same; the section is not. Here is the 2025 Act text, the limits, and the one condition that decides which limit you get.
Published · Last reviewed · 4 min read
- The Income-tax Act, 2025 "shall come into force on the 1st April, 2026" (section 1(3)). From tax year 2026-27 the presumptive scheme for professions is section 58(2), Table Sl. No. 3.
- Gross receipts must not exceed ₹50 lakh, or ₹75 lakh "where the amount or aggregate of amounts received in cash does not exceed 5% of the gross receipts". A non-account-payee cheque or draft counts as cash (section 58(9)).
- Deemed profit is 50% of gross receipts or the actual profit if higher; no further deduction is allowed (section 58(4)). Claiming a lower profit means books under section 62 and an audit under section 63.
Section 44ADA of the Income-tax Act, 1961 is the presumptive taxation scheme for professions, carried from 1 April 2026 in section 58(2), Table Sl. No. 3 of the Income-tax Act, 2025: a resident individual or firm (not an LLP) in a specified profession such as medicine declares "50% of the gross receipts or profit claimed to have been actually earned, whichever is higher" as income when gross receipts do not exceed ₹50 lakh, or ₹75 lakh where cash receipts are 5% or less. The doctor pays tax on that deemed profit and keeps no books for the practice.
Which Act applies to which year?
Section 1(3) of the Income-tax Act, 2025 says it "shall come into force on the 1st April, 2026". So the return a doctor files in 2026 for the year ended 31 March 2026 is still under the 1961 Act and its section 44ADA. From the tax year beginning 1 April 2026, the 2025 Act applies and the same scheme is section 58. The Finance Act, 2026 did not change the Sl. No. 3 limits; its only amendment to section 58 removes a sub-clause from the definition of "eligible assessee" in section 58(11)(a), which concerns the business scheme, not the profession scheme. Our post on income tax for doctors under 44ADA walks through the full 2025 Act with the 1961 numbers in brackets.
Who qualifies?
Two tests. The person: section 58(11)(b) defines a "specified assessee" as "an individual or a firm, other than a limited liability partnership, who is a resident in India". A private limited company or an LLP running the clinic is out. The profession: section 62(4) lists the specified professions as "legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, information technology or company secretary", plus any the Board notifies. A doctor is in; a diagnostic centre run as a company is not.
What are the limits and the cash condition?
Column D of the table gives two ceilings on gross receipts in the tax year: "(a) Does not exceed fifty lakh rupees; or (b) does not exceed seventy-five lakh rupees, where the amount or aggregate of amounts received in cash does not exceed 5% of the gross receipts." Section 58(9) adds that receipt "by a cheque drawn on a bank or by a bank draft, which is not account payee, shall be deemed to be the receipt in cash". UPI, card and account-payee cheques are on the safe side. The test is on the year's total, so a clinic that takes most fees in cash through the year cannot fix the ratio in March.
What does the scheme take away?
Deductions. Section 58(4): "Any loss, allowance or deduction allowable under the provisions of this Act, shall not be allowed against the income computed in the manner specified in sub-section (2)." Rent, staff salary, consumables and depreciation are treated as inside the other 50%. Section 58(6) computes the written-down value of equipment as if depreciation had been claimed each year. And section 58(3) sets the price of claiming less: a specified assessee who says actual profit is lower than 50% and whose total income exceeds the exemption limit "shall be required to" keep books under section 62 and get them audited under section 63. The books side is in books of account for doctors.
What does this look like at a small OPD?
A resident doctor runs a single-doctor clinic as a proprietor. Gross receipts for the tax year are ₹40,00,000, of which ₹1,00,000 came in cash and the rest by UPI and card. Receipts are under ₹50 lakh, so the scheme applies on either limit; cash is 2.5%, so the ₹75 lakh ceiling would also have been available. Deemed profit is ₹20,00,000, and the doctor pays tax on that without producing a profit and loss account for the clinic. The illustration ignores other income and deductions; the slab arithmetic is in the post linked above.
Questions
Is 44ADA still available in 2026?
Yes, as section 58(2), Table Sl. No. 3 of the Income-tax Act, 2025, which is in force from 1 April 2026. The limits and the 50% rate are the same as under section 44ADA.
What is the 44ADA limit for doctors?
Gross receipts up to ₹50 lakh in the tax year, or up to ₹75 lakh if cash receipts (including non-account-payee cheques and drafts) are 5% or less of gross receipts.
Can a doctor claim rent and salaries on top of the 50%?
No. Section 58(4) disallows any loss, allowance or deduction against the presumptive income. A doctor whose real expenses exceed 50% can opt out, but then keeps books and gets an audit under section 58(3).
Sources
- Ministry of Law and Justice, The Income-tax Act, 2025 (No. 30 of 2025), Gazette of India Extraordinary, 21 August 2025: sections 1(3), 58(2) Table Sl. No. 3, 58(3), 58(4), 58(6), 58(9), 58(11) and 62(4) (accessed 30 Oct 2026)
- Ministry of Law and Justice, The Finance Act, 2026 (No. 4 of 2026), Gazette of India Extraordinary, 30 March 2026: section 40 (amendment of section 58) (accessed 30 Oct 2026)
This is operational guidance for clinics, not legal or tax advice. Confirm with your state authority, council or CA.
Drafted with AI assistance; every fact checked against the sources listed; reviewed by the Vitels team.