A major reason of low tax compliance in India is the burden related maintaining books of account. Although in recent years steps have been taken to improve that. Moreover assesses now have facilities, and not just relating to tax. You can now avail calculators, such as online income tax calculator and online pension plan calculators among others.
But if you are a professional or run a small business, it is the Financial Act 2016 that must have brought cheers to you. It has certain amendments, one of them relating to presumptive taxation. The Finance Act has made things simpler for doctors, lawyers, chartered accountants, etc. by reducing the amount of effort needed to estimate the income for the year and also to file the returns.
Under the Presumptive Taxation Scheme (PTS), eligible businesses can file the return and pay tax on the basis of ‘presumed’ income. They can estimate their income at the rate of 8% of the total turnover. From the current financial year, professionals have been included under the umbrella.
Eligible professionals
The act includes those who are governed or regulated by an institute or body such as doctors, lawyers, architects, interior designers. Also, such professionals should have gross receipts under Rs. 50 lakh.
No advance tax payment
All professionals and businesses usually have to adhere to advance tax payment rules. However, under PTS, a professional is exempt from paying advance tax. This means that he or she does not have to estimate the income four times a year and pay advance tax accordingly. Instead, the professional has to go through the exercise just once.
But if you are a professional or run a small business, it is the Financial Act 2016 that must have brought cheers to you. It has certain amendments, one of them relating to presumptive taxation. The Finance Act has made things simpler for doctors, lawyers, chartered accountants, etc. by reducing the amount of effort needed to estimate the income for the year and also to file the returns.
Under the Presumptive Taxation Scheme (PTS), eligible businesses can file the return and pay tax on the basis of ‘presumed’ income. They can estimate their income at the rate of 8% of the total turnover. From the current financial year, professionals have been included under the umbrella.
Eligible professionals
The act includes those who are governed or regulated by an institute or body such as doctors, lawyers, architects, interior designers. Also, such professionals should have gross receipts under Rs. 50 lakh.
No advance tax payment
All professionals and businesses usually have to adhere to advance tax payment rules. However, under PTS, a professional is exempt from paying advance tax. This means that he or she does not have to estimate the income four times a year and pay advance tax accordingly. Instead, the professional has to go through the exercise just once.
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