Salaried vs Business Tax — Illustrated
All math runs on your device — nothing is sent or saved. Last updated: October 2026.
Same ₹10L in hand, taxed two ways. Educational comparison, not a precise business-tax tool.
Salaried tax (new regime)
₹0
TDS via employer · ITR-1/2
44AD business (6% digital profit)
₹0
Profit ₹60,000 · ITR-4
44ADA professional (50% profit)
₹0
Profit ₹5,00,000 · ITR-4
Business: no employer TDS — pay advance tax yourself (15 Jun / 15 Sep / 15 Dec / 15 Mar) if yearly liability exceeds ₹10,000, else 234B/234C interest. ITR-3/ITR-4; salaried use ITR-1/ITR-2.
What is this tool?
This educational tool puts the same annual receipts through two worlds: salaried (employer TDS, new-regime slabs, ITR-1/ITR-2) versus business under the 44AD presumptive scheme (6% of digital turnover deemed profit) and 44ADA for professionals (50% of receipts deemed profit). It shows why a freelancer keeps more at first glance — and the advance-tax duty that comes with it.
How to use this calculator
- Enter your annual receipts (or salary) at the top — try ₹10,00,000 to see the classic comparison.
- Compare the three cards. 44AD/44ADA profits are deemed figures the law lets small taxpayers declare without books.
- Read the advance-tax strip: no employer means YOU pay in 4 instalments if yearly tax crosses ₹10,000.
Salary vs business questions
44AD aur 44ADA mein kya fark hai? / What is the difference between 44AD and 44ADA?
44AD is for small businesses (~6% of digital turnover deemed profit); 44ADA is for specified professionals (50% of gross receipts deemed profit). Both skip books and audit below turnover limits.
Freelancer ko advance tax kab bharna hai? / When does a freelancer pay advance tax?
15 June, 15 September, 15 December and 15 March, whenever yearly liability exceeds ₹10,000 — otherwise interest under 234B/234C. Salaried people never face this because TDS covers them.
Which ITR form should a freelancer file?
ITR-4 for presumptive (44AD/44ADA) income, ITR-3 for regular business income with books. Salaried-only income uses ITR-1/ITR-2.
Read the full Income Tax Guide →
Estimate for tax-planning guidance only — not tax advice. Slabs change almost every Budget (verify each March). Confirm on incometax.gov.in or with a tax professional before filing.
Worked example: ₹15 lakh a year — salaried vs professional (new regime)
- Salaried: ₹15,00,000 − ₹75,000 standard deduction = ₹14,25,000 taxable. Tax = ₹20,000 (4–8 lakh) + ₹40,000 (8–12 lakh) + ₹33,750 (12–14.25 lakh) = ₹93,750 + 4% cess = ₹97,500.
- Professional under presumptive taxation (Section 44ADA): 50% of ₹15,00,000 gross receipts = ₹7,50,000 taxable income — below ₹12 lakh, so the rebate makes tax nil.
- The gap is large, but 44ADA applies only to notified professions (doctors, lawyers, engineers, consultants and others) with receipts up to ₹75 lakh when cash receipts are within 5%.
How the Salary vs business tax comparison works: the rules
- New-regime slabs: 0–4 lakh nil, 4–8 lakh 5%, 8–12 lakh 10%, 12–16 lakh 15%, 16–20 lakh 20%, 20–24 lakh 25%, above 24 lakh 30%.
- Salaried people get a ₹75,000 standard deduction in the new regime; the rebate makes income up to ₹12 lakh tax-free (special-rate income excluded).
- Presumptive schemes: 44ADA for professionals (50% deemed profit) and 44AD for small businesses (6% of digital or 8% of cash turnover) — section numbers continue in the Income-tax Act, 2025 framework.
Salary vs business tax comparison: frequently asked questions
Is it better to be salaried or a consultant for tax?
At the same income, a consultant using presumptive taxation often pays less tax, but loses employer benefits like PF, gratuity and paid leave.
What is Section 44ADA?
A presumptive scheme for notified professionals where 50% of gross receipts is treated as profit, with no need to keep detailed books.
Can a salaried person also use 44ADA for side income?
Yes, freelance professional income can be declared under 44ADA in the same return, while salary is taxed separately.
What is the tax-free income limit in the new regime?
Up to ₹12 lakh of taxable income is effectively tax-free due to the rebate; salaried people get ₹12.75 lakh with the standard deduction.
Which ITR form is used for 44ADA?
ITR-4 (Sugam) for eligible individuals, or ITR-3 if you have other income types not allowed in ITR-4.
Does GST apply to consultants?
Only if turnover exceeds the GST threshold (usually ₹20 lakh for services, ₹10 lakh in special-category states).
Official sources: Income Tax Department — tax slabs and presumptive taxation· Last reviewed 2026-10-30. Results are estimates — confirm final figures with your lender, insurer or tax adviser.