Budget proposes raising limit for presumptive taxation
1 min read . Updated: 01 Feb 2023, 02:02 PM IST
PremiumThe Budget proposed raising the income range for small enterprises from ₹2 crore to ₹3 crore and for professionals from ₹50 lakh to ₹75 lakh to avail the presumptive taxation scheme
New Delhi: Union finance minister Nirmala Sitharaman on Wednesday proposed raising the income limit for presumptive taxation for micro-enterprises and professionals. Presenting the Budget for FY2023-24, the minister proposed raising the income range for small enterprises from ₹2 crore to ₹3 crore and for professionals from ₹50 lakh to ₹75 lakh to avail the presumptive taxation scheme.
As per existing norms, businesses with sales of ₹2 crore and less can sign up for presumptive taxation and 6% or 8% of their gross receipts will be treated as their income subject to riders.
Sitharaman said in her speech that micro, small and medium enterprises (MSMEs) are growth engines of our economy. “Micro enterprises with turnover up to ₹2 crore and certain professionals with turnover of up to 50 lakh can avail of the benefit of presumptive taxation. I propose to provide enhanced limits of ₹3 crore and ₹75 lakh respectively, to the tax payers whose cash receipts are no more than 5%," Sitharaman said.
To support MSMEs in timely receipt of payments, the budget proposed to allow deduction for expenditure incurred on payments made to them only when payment is actually made. The move seeks to ensure that small businesses get their dues from their clients without delays. The government had earlier made it compulsory for large businesses to disclose if there is any delay in payments to small businesses.
Sitharaman also said it has been the constant endeavour of the Income Tax Department to improve tax payer services by making compliance easy and smooth.
