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Digital push to help small traders save up to 46% in tax: Govt

Apart from making tax saving, small traders would be able to build their books which may help them get loans easily, said FM

Press Trust of India  |  New Delhi 

Digital push to help small traders save up to 46% in tax: Govt

on Tuesday said small traders will be able to save up to 46 per cent in by migrating from to transaction mode, as the decision to tweak the presumptive norms would reduce liability.

“Apart from making saving of up to 46 per cent by migrating to mode, small traders would be able to build their books which may help them get loans easily,” ministry said in a statement.

Also, if transactions are carried out through channels, then anybody having annual turnover of up to Rs 66 lakhs will have zero liability after availing the benefit of Section 80C, after amendment of the rate structure, it said.

Earlier in the day, Minister said “The object is if you do transactions using mode then you can pay less It is a incentive to support digitisation of the economy. Some traders would get more than 30 per cent advantage if they make transactions through route.”

Under the existing Section 44AD of the Income-Act, 1961 — an individual, Hindu undivided family or a partnership firm other than limited liability partnership — carrying on any business, having a turnover of Rs 2 crore or less, the profit is deemed to be 8 per cent of the total turnover for taxation. 

He said in the Budget for 2016-17, small traders and businessmen, with turnover of up to Rs 2 crore who did not maintain proper accounts, were presumed to have earned 8 per cent or profit for purposes. But if they use mode of payments, their will now be presumed to be 6 per cent of the turnover and not 8 per cent.

Following decision to demonetise old Rs 500/1,000 notes, the has taken several measures to encourage payments to promote less economy.

Citing example, the statement said, if a trader makes his transactions in on a turnover of Rs 2 crore, then his under the presumptive scheme will then be presumed to be Rs 16 lakhs at the rate of 8 per cent of turnover.

After availing of Rs 1.5 lakh of deduction under Section 80C, his total liability will be Rs 2,67,800.

However, if he shifts to 100 per cent transactions under the new announcement made, his profit will be presumed to be at Rs 12 lakh at the rate of 6 per cent of turnover, and after availing of Rs 1.5 lakh under Section 80C, his liability now will be only Rs 1,44,200.


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Digital push to help small traders save up to 46% in tax: Govt

Apart from making tax saving, small traders would be able to build their books which may help them get loans easily, said FM

Apart from making tax saving, small traders would be able to build their books which may help them get loans easily, said FM
on Tuesday said small traders will be able to save up to 46 per cent in by migrating from to transaction mode, as the decision to tweak the presumptive norms would reduce liability.

“Apart from making saving of up to 46 per cent by migrating to mode, small traders would be able to build their books which may help them get loans easily,” ministry said in a statement.

Also, if transactions are carried out through channels, then anybody having annual turnover of up to Rs 66 lakhs will have zero liability after availing the benefit of Section 80C, after amendment of the rate structure, it said.

Earlier in the day, Minister said “The object is if you do transactions using mode then you can pay less It is a incentive to support digitisation of the economy. Some traders would get more than 30 per cent advantage if they make transactions through route.”

Under the existing Section 44AD of the Income-Act, 1961 — an individual, Hindu undivided family or a partnership firm other than limited liability partnership — carrying on any business, having a turnover of Rs 2 crore or less, the profit is deemed to be 8 per cent of the total turnover for taxation. 

He said in the Budget for 2016-17, small traders and businessmen, with turnover of up to Rs 2 crore who did not maintain proper accounts, were presumed to have earned 8 per cent or profit for purposes. But if they use mode of payments, their will now be presumed to be 6 per cent of the turnover and not 8 per cent.

Following decision to demonetise old Rs 500/1,000 notes, the has taken several measures to encourage payments to promote less economy.

Citing example, the statement said, if a trader makes his transactions in on a turnover of Rs 2 crore, then his under the presumptive scheme will then be presumed to be Rs 16 lakhs at the rate of 8 per cent of turnover.

After availing of Rs 1.5 lakh of deduction under Section 80C, his total liability will be Rs 2,67,800.

However, if he shifts to 100 per cent transactions under the new announcement made, his profit will be presumed to be at Rs 12 lakh at the rate of 6 per cent of turnover, and after availing of Rs 1.5 lakh under Section 80C, his liability now will be only Rs 1,44,200.


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Business Standard
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Digital push to help small traders save up to 46% in tax: Govt

Apart from making tax saving, small traders would be able to build their books which may help them get loans easily, said FM

on Tuesday said small traders will be able to save up to 46 per cent in by migrating from to transaction mode, as the decision to tweak the presumptive norms would reduce liability.

“Apart from making saving of up to 46 per cent by migrating to mode, small traders would be able to build their books which may help them get loans easily,” ministry said in a statement.

Also, if transactions are carried out through channels, then anybody having annual turnover of up to Rs 66 lakhs will have zero liability after availing the benefit of Section 80C, after amendment of the rate structure, it said.

Earlier in the day, Minister said “The object is if you do transactions using mode then you can pay less It is a incentive to support digitisation of the economy. Some traders would get more than 30 per cent advantage if they make transactions through route.”

Under the existing Section 44AD of the Income-Act, 1961 — an individual, Hindu undivided family or a partnership firm other than limited liability partnership — carrying on any business, having a turnover of Rs 2 crore or less, the profit is deemed to be 8 per cent of the total turnover for taxation. 

He said in the Budget for 2016-17, small traders and businessmen, with turnover of up to Rs 2 crore who did not maintain proper accounts, were presumed to have earned 8 per cent or profit for purposes. But if they use mode of payments, their will now be presumed to be 6 per cent of the turnover and not 8 per cent.

Following decision to demonetise old Rs 500/1,000 notes, the has taken several measures to encourage payments to promote less economy.

Citing example, the statement said, if a trader makes his transactions in on a turnover of Rs 2 crore, then his under the presumptive scheme will then be presumed to be Rs 16 lakhs at the rate of 8 per cent of turnover.

After availing of Rs 1.5 lakh of deduction under Section 80C, his total liability will be Rs 2,67,800.

However, if he shifts to 100 per cent transactions under the new announcement made, his profit will be presumed to be at Rs 12 lakh at the rate of 6 per cent of turnover, and after availing of Rs 1.5 lakh under Section 80C, his liability now will be only Rs 1,44,200.


image
Business Standard
177 22