Income tax calculator for freelancers and small businesses

Gross receipts or turnover for the yearEverything clients paid you in the year, before expenses and without GST.INR

How your profit is worked outConsultants, developers and designers usually use 44ADA; traders and shops 44AD.

Share received by bank or digital payment (44AD)6 % of digital receipts and 8 % of cash receipts count as profit.%

Business expenses (actual profit only)Used only with actual profit from books. Ignored by 44ADA and 44AD.INR

Cash receipts are 5 % or less of the totalRaises the limits to ₹75 lakh (44ADA) and ₹3 crore (44AD).

Tax regimeThe new regime is the default. Business owners can leave it and return only once.

Old regime: deductions such as 80C and 80DPPF, ELSS, life and health insurance. Ignored in the new regime.INR

Your ageMatters only in the old regime, where the tax-free limit rises at 60 and 80.

Income tax for the year

₹0

Effective rate 0 %

Presumptive profit (44ADA)₹10,00,000
Taxable income₹10,00,000
Tax free in the nil slab (first ₹4 lakh)₹4,00,000
Income tax at slab rates, top slab10 %−₹40,000
Rebate, slab income up to ₹12 lakh (section 156)+₹40,000
Health and Education Cess₹0
Profit left after tax₹10,00,000

An estimate under the rules for the chosen year, for typical cases. It is not tax advice: check the result with the tax office or an adviser before you file.

How it is calculated

Professionals such as consultants, designers, doctors and developers can use section 44ADA. Half of your gross receipts counts as profit and you do not need to keep detailed books. The limit is ₹50 lakh, or ₹75 lakh if cash receipts are at most 5 % of the total.

Small businesses can use section 44AD. Profit is 6 % of turnover received through banks or digital payments and 8 % of the rest. The limit is ₹2 crore, or ₹3 crore with mostly digital receipts.

The profit is taxed at your slab rates. Under the new regime income up to ₹12 lakh is tax free thanks to the rebate. Above that, slabs run from 5 % to 30 %, and 4 % cess is added on top.

Under a presumptive scheme you pay the whole year's advance tax by 15 March. With actual profit you pay in four instalments: 15 %, 45 %, 75 % and 100 % by 15 June, 15 September, 15 December and 15 March.

You are a resident individual and this is your only income.
Presumptive profit is the legal minimum. You can declare more, but declaring less means keeping books and an audit.
The higher limits of ₹75 lakh (44ADA) and ₹3 crore (44AD) apply only when cash receipts are at most 5 % of the total.
Under the new regime most deductions are not allowed. Under the old regime you can enter 80C, 80D and other deductions.
GST, professional tax and advance tax interest under sections 234B and 234C are not included.
Tax year 2026-27 uses the same rates and limits as 2025-26, as Budget 2026-27 left them unchanged.
Advance tax is due only if the year's tax is ₹10,000 or more; the calculator shows the instalments whenever there is tax.

Questions

How much tax does a freelancer pay on ₹20 lakh?

Under 44ADA your profit is ₹10 lakh. In the new regime that is below ₹12 lakh, so the rebate brings your tax to zero in FY 2026-27.

Do freelancers get the ₹75,000 standard deduction?

No. The standard deduction is only for salary and pension income. Freelance income is business or professional income.

Which ITR form do I file?

ITR-4 (Sugam) if you use 44AD or 44ADA and your total income is up to ₹50 lakh. Otherwise ITR-3. For FY 2025-26, ITR-3 and ITR-4 without audit are due on 31 August 2026.

Can I switch between the new and old regime every year?

Not freely. With business or professional income you can opt out of the new regime once and come back once. Salaried people can choose every year.

Sources

Now keep it on track Set the result as a budget in Spendee and see each month how much is left.

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