ITR Filing 2025:With just about a month left to file income tax returns, many people have started working on their ITRs. In the middle of this rush, a post on Reddit has caught everyone’s attention and started a big debate. A user named Mayand69 shared that his father, who works as an independent advocate in a civil court, could possibly pay zero tax on ₹20 lakh income if he filed under ITR 4 using Section 44ADA.
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In his post he wrote:
“Just a small query here, any qualified personnel please help.
My father is an advocate (independent) in Civil Court. I have a small query while filling his returns.
ITR 3: Gross total receipt: INR 20,00,000 and he has close to no professional expense. So his tax liability roughly comes as 3,00,000 under new tax regime.
ITR4: Gross Total Receipt: INR 20,00,000 According to 44ADA presumptive scheme he can claim 50% as expense so his profit comes down to INR 10,00,000. Now his tax liability becomes 0 under new tax regime.
his tax liability becomes 0 under new tax regime. So, isn’t it a loss for the IT Department? Is it legal? I am genuinely seeking help as I have zero knowledge about this. Or am I going wrong somewhere?”
How Section 44ADA Works?
The presumptive tax scheme under Section 44ADA is meant for certain professions like lawyers, doctors, architects, and freelancers. It lets them pay tax on only 50% of their gross receipts, without having to show all actual expenses.
Anyone with annual receipts under ₹50 lakh can use it and they do not need to maintain detailed books of accounts. This rule can cut the taxable income by half, and in some cases, it can make the tax bill much smaller, even zero.
Abhishek Soni, CEO of Tax2Win, explained, “Under Section 44ADA, if any specified professional has the gross receipts of ₹20 lakh (as per example), they must declare income equal to either 50% of their gross receipts or their actual income, whichever is higher. Those opting for this scheme are not required to maintain detailed books of accounts for expenses if the annual gross receipts are under ₹50 lakh.”
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Why Tax Liability won’t be Zero in this case
While the Reddit post suggested zero tax, experts say that’s not correct for the current year.
Soni pointed out, “In the given example, if the taxpayer avails the benefit under Section 44ADA, his taxable income will come down to ₹10 lakh. That being said, if he opts for the new tax regime, his tax liability won’t be zero. As per the new tax regime for FY25, for those who fall in the ₹7-10 lakh income bracket, a 10% tax rate is applicable. On the other hand, those who earn ₹20 lakh and do not qualify for the Section 44ADA benefit, their taxable income and tax slab would be higher, leading to a greater tax outgo.”
It’s also important to note that the rule where people can pay zero income tax on income up to ₹12 lakh applies only for returns filed for FY26, not FY25, and only if the person has not earned any capital gains during the year.
