Home / Knowledge / News / Textiles / Govt reduces tax for small traders going digital
Govt reduces tax for small traders going digital
20
Dec '16
In order to incentivise small traders and businesses to proactively accept payments through digital means, the government has decided to reduce the existing rate of deemed profit under section 44AD of the Income Tax Act. This is applicable only for those payments that are accepted through banking channel or digital means for the financial year 2016-17.
 
Under the existing provisions of section 44AD of the Income-tax Act, 1961 (the Act), in case of certain assesses (i.e. an individual, HUF or a partnership firm other than LLP) carrying on any business (other than transportation, agency, brokerage and commission) and having a turnover of Rs 2 crore or less, the profit is deemed to be 8 per cent of the total turnover.
 
“In order to achieve the government’s mission of moving towards a less cash economy and to incentivise small traders and businesses to proactively accept payments by digital means, it has been decided to reduce the existing rate of deemed profit of 8 per cent under section 44AD of the Act to 6 per cent in respect of the amount of total turnover or gross receipts received through banking channel and digital means for the financial year 2016-17,” the Central Board of Direct Taxes (CBDT) said in a statement.
 
“However, the existing rate of deemed profit of 8 per cent referred to in section 44AD of the Act, shall continue to apply in respect of total turnover or gross receipts received in cash,” the CBDT statement added. “Legislative amendment in this regard shall be carried out through the Finance Bill, 2017.”
 
Explaining this important change, finance minister Aun Jaitley said, “All small traders, businessmen and workshop owners whose total turnover is less than Rs 2 crore a year may not maintain any books of account and their income was presumed to be 8 per cent of turnover. Now this order has been amended. And to the extent that they deal digitally or through cheques and banking transactions the presumptive income will not be 8 per cent but will be 6 per cent.”
 
“Therefore the object of this order is that those who deal in digital or through a banking transaction mode their income will be presumed to be 2 per cent less, that is 6 per cent, and accordingly this will constitute a major tax relief to be given to them,” he said. (RKS)

Fibre2Fashion News Desk – India


Interviews View All

Software Firms, Head honchos

Software Firms
Head honchos

AI / robotics may challenge existing long value chains

Top executives, Textile industry, India

Top executives
Textile industry, India

The event should be organised every year

Top executives, Textile industry

Top executives
Textile industry

Customised t-shirts is not a fad

Wesly Clements,

Wesly Clements

US-based Baldwin Technology Company is a global manufacturer and supplier...

Sugandha Bhardwaj,

Sugandha Bhardwaj

<div>New Delhi-based Brinjal Designs Pvt Ltd manufactures home furnishing...

Karen Lou,

Karen Lou

Australia-based Sunseeker has been creating swimwear since 1970. Sunseeker ...

Paige Mullis, Glen Raven Inc

Paige Mullis
Glen Raven Inc

Paige Mullis discusses the expansion plans of Glen Raven Inc in India, and ...

Chunyi Zhi, City University of Hong Kong

Chunyi Zhi
City University of Hong Kong

<div><b>Chunyi Zhi</b>, associate professor in the Department of Materials ...

Hemant Bheda, Arevo

Hemant Bheda
Arevo

Arevo, based in Silicon Valley in California, develops technology to...

Samar Firdos, Arvind Ltd

Samar Firdos
Arvind Ltd

<b>Samar Firdos</b>, Chief Manager (Design) at Lifestyle Apparel Denim...

Akta Adani, India Boulevard

Akta Adani
India Boulevard

India Boulevard is a San Francisco-based curated fashion marketplace that...

Ritu Kumar, Label Ritu Kumar

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


November 2019

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

Follow us on instagram

Follow

Follow Fibre2Fashion On


Advanced Search