Pay “Zero” Tax on Professional Receipts of up to Rs.24 Lakhs:

Pay “Zero” Tax on Professional Receipts of up to Rs.24 Lakhs Budget 2025 presented on 1st Feb made various changes to direct taxation. Finance Minister Nirmala Sitharaman has proposed a revised tax slab under new tax regime that intends to decrease the tax burden. So, what will be the tax applicability on professional income up to Rs.24 Lakh? Section 44ADA – Presumptive Tax for Professionals Section 44ADA outlines a presumptive taxation scheme for professionals such as doctors, engineers, and lawyers. As an alternative to traditional tax computation, they can pay a flat rate of 50% of their gross receipts with no deductions. Paying tax on 50% of gross receipts reduces many professionals' taxable income. So let say, if professional income is Rs.24 Lakh and only 50% book profit to be shown, then taxable income reduced to Rs.12 Lakh. After which you get the rebate benefit. Let's understand it in other way - If we take an example of above mentioned professional income i.e. Rs.24 Lakh and only 50% book profit to be shown, then taxable income reduced to Rs.12 Lakh. As per new tax regime the new tax rate slab are:

0-4L	0%
4-8L	5%
8-12L	10%
12-16L	15%
16-20L	20%
20-24L	25%
Above 24L	30%

Example: Taxable income = Rs.12 Lakh Calculate tax liability Income 4L - 8L = 4,00,000*5% = Rs.20,000 Income 8L -12L = 4,00,000*10% = Rs.40,000 Total Tax Liability = Rs.60,000 The total tax liability comes to Rs.60,000, but after deducting the rebate amount i.e. Rs.60,000 under new tax regime. The tax liability becomes 'nil' or 'zero'. Assumption: No Other Income apart from Professional Receipts.