Hey @Siddharth_Jogi,
Yes, If you’re a freelancer earning up to ₹24 lakh in professional fees, you may not have to pay any income tax on it. That’s because of the presumptive taxation scheme u/s 44ADA along with the revised tax slabs in Budget 2025. Here’s how.
See, under the presumptive taxation scheme, you declare a fixed percentage of your revenue as profits. In case of professionals/freelancers, instead of taxing you on your total earnings, the government assumes that only 50% of your total receipts is profit—the rest is considered expenses.
Under this scheme,
- You don’t have to maintain detailed books of accounts.
- You declare 50% of your annual gross receipts as profits.
- Your total receipts should be less than ₹75L (₹50L if more than 5% of transactions are in cash)
Now, as per amendments in Union Budget 2025, the tax rebate u/s 87A has been increased to ₹60,000, which effectively makes income up to ₹12 lakh tax-free under the new regime.
So, if your gross receipts are ₹24L and you opt for presumptive taxation scheme, you can declare 50% of the receipts as profit. Hence, your net taxable income becomes 50% of ₹24L, which is ₹12L.
Now, as this income is taxed as per slab rates, you’ll be eligible for rebate u/s 87A and as the income is within the threshold of ₹12L, you’ll have to pay zero tax on your income.