Thrivelance Tools
Thinking of switching from a salary to consultant billing? Compare your real take-home as a salaried employee versus a professional under Section 44ADA, where only 50% of receipts is taxed. FY 2025-26 (AY 2026-27) slabs, new and old regime.
Same headline income, taxed two ways. Figures update as you type.
Salaried take-home
₹0
After standard deduction + tax.
Consultant take-home
₹0
Under 44ADA: only 50% taxed.
Difference
₹0
| Breakdown | Salaried | Consultant (44ADA) |
|---|---|---|
| Taxable income | ||
| Total tax (incl. 4% cess) | ||
| Effective rate on income |
It's a presumptive taxation scheme for professionals — consultants, freelancers, doctors, lawyers, engineers, designers. You declare 50% of your gross receipts as income and pay tax on that, no expense records required, as long as receipts stay within ₹75 lakh (cash receipts under 5%).
Under the new regime, income up to ₹12 lakh is rebated to zero tax. Because a consultant is taxed on just half of receipts, billing up to about ₹24 lakh can mean a taxable income of ₹12 lakh — and effectively no income tax. That's the headline draw this tool surfaces.
A salary brings EPF, gratuity, paid leave, and employer-paid health insurance. As a consultant you fund all of that yourself, carry the GST and advance-tax compliance, and lose income security. Subtract the value of those benefits before deciding the lower tax is worth it.
See your salaried numbers in the India Salary Calculator or convert a package with the CTC to In-Hand Calculator. The deemed 50% assumes low overheads — if your real business costs are higher, your actual margin is smaller.
Common questions about this calculator.
On tax alone, a consultant usually wins: under Section 44ADA only 50% of gross receipts is taxed, so the effective rate is far lower than a salary. But a salary brings EPF, gratuity, paid leave, and employer health cover. Compare the take-home gap here, then subtract the value of those benefits before deciding.
Eligible professionals with gross receipts up to ₹75 lakh (cash receipts under 5%) can declare 50% of receipts as taxable income, with no need to maintain books of account. Tax is then charged on that 50% using the normal slabs, plus 4% cess.
Yes. The new-regime Section 87A rebate makes income up to ₹12 lakh tax-free, and it applies to 44ADA professional income. Since only half of receipts is taxed, billing up to roughly ₹24 lakh can mean zero income tax under the new regime.
Service providers must register for GST once turnover crosses ₹20 lakh (₹10 lakh in some states). GST is collected from clients and passed to the government, so it isn't an income-tax cost, but it adds compliance. This calculator focuses on income tax only.
Consultants under 44ADA file ITR-4 and pay advance tax — for presumptive professionals the whole amount is due by 15 March. Salaried employees usually file ITR-1 or ITR-2, with tax deducted at source by the employer.
