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Modified norms to lower taxes of small traders by 30%: FM Jaitley

The decision has been taken to achieve the government's mission of moving towards a less cash economy

Press Trust of India  |  New Delhi 

Modified norms to lower taxes of small traders by 30%: FM Jaitley

Minister today said the government's decision to tweak the presumptive norms would reduce the liability by up to 30 per cent for those small traders opting for transactions.

He said in the Budget for 2016-17, small traders and businessmen, with a 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.



"So he will get a significant benefit. The object is if you do transactions using mode then you can pay less It is a incentive to support digitisation of the economy. And if we calculate it, then some traders would get over 30 per cent advantage if he transacts through mode," Jaitley told reporters here.

Under the existing Section 44AD of the Income-Act, 1961, in case of certain assessees (an individual, HUF or a partnership firm other than LLP) 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.

"...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/means for the financial year 2016-17," the (CBDT) had said yesterday in a notification.

The decision has been taken to achieve the government's mission of moving towards a less cash economy and to incentivise small traders/businesses to proactively accept payments by means, the CBDT said.

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

Modified norms to lower taxes of small traders by 30%: FM Jaitley

The decision has been taken to achieve the government's mission of moving towards a less cash economy

The decision has been taken to achieve the government's mission of moving towards a less cash economy Minister today said the government's decision to tweak the presumptive norms would reduce the liability by up to 30 per cent for those small traders opting for transactions.

He said in the Budget for 2016-17, small traders and businessmen, with a 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.

"So he will get a significant benefit. The object is if you do transactions using mode then you can pay less It is a incentive to support digitisation of the economy. And if we calculate it, then some traders would get over 30 per cent advantage if he transacts through mode," Jaitley told reporters here.

Under the existing Section 44AD of the Income-Act, 1961, in case of certain assessees (an individual, HUF or a partnership firm other than LLP) 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.

"...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/means for the financial year 2016-17," the (CBDT) had said yesterday in a notification.

The decision has been taken to achieve the government's mission of moving towards a less cash economy and to incentivise small traders/businesses to proactively accept payments by means, the CBDT said.

Following decision to demonetise old Rs 500/1,000 notes, the has taken several measures to encourage payments to promote less cash economy.
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Business Standard
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Modified norms to lower taxes of small traders by 30%: FM Jaitley

The decision has been taken to achieve the government's mission of moving towards a less cash economy

Minister today said the government's decision to tweak the presumptive norms would reduce the liability by up to 30 per cent for those small traders opting for transactions.

He said in the Budget for 2016-17, small traders and businessmen, with a 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.

"So he will get a significant benefit. The object is if you do transactions using mode then you can pay less It is a incentive to support digitisation of the economy. And if we calculate it, then some traders would get over 30 per cent advantage if he transacts through mode," Jaitley told reporters here.

Under the existing Section 44AD of the Income-Act, 1961, in case of certain assessees (an individual, HUF or a partnership firm other than LLP) 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.

"...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/means for the financial year 2016-17," the (CBDT) had said yesterday in a notification.

The decision has been taken to achieve the government's mission of moving towards a less cash economy and to incentivise small traders/businesses to proactively accept payments by means, the CBDT said.

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

image
Business Standard
177 22