Different Presumptive Income Schemes for Small Business

There are 3 schemes

• For Professionals
• For Business
• For Goods Transport Agency

For Professionals

Presumptive Income of Professionals

Applicable for Financial Year 2016-17 (AY 2017-18)

IF Gross Receipts upto 50 lacs

• 50% of Receipts will be Profit
• No need for Audit
• No need to maintain books of accounts

If Professional says that his profit less than 50%,then compulsory books of accounts and compulsory audit

Change in Budget

For Business

For small proprietorship and partnership business

• There is no need to maintain books of accounts and get accounts audited by CA
• They can straight away show 8% of turnover as Profit and pay Income tax on it
• (As per Section 44AD)  Upto F.Y 2014-15

Note:-8% is Minimum Profit to be shown, Assesses can show more than 8% profit also

What if assess show less than 8% profit or loss?  

It is not allowed as per Section 44AD

He has to compulsorily gets accounts audited and pay tax on it.

Note:-

This Scheme is applicable for Small business whose turnover is upto 1 crore(Form Financial Year 2016-17,limit is increased to 2 Crore )

This scheme only for Proprietorship and Partnership who are Resident

Section 44AD Scheme now 6% for non cash payment

Form FY 2015-16 (AY 2016 - 17)

• If Turnover of Business upto 1 Crore,then 8 % of Turnover is Profit
• No need to make books of accounts
• No need to do Audit

 

Section 44AD Scheme

• For FY 2016-17 (AY 2017-18) onward
• If Turnover of Business upto 2 Crore,then
• 8 % of Turnover is Profit for Cash Transactions
• 6% of Turnover is Profit for Other Transactions
• No need to make books of accounts
• No need to do Audit

While Others Changes are applicable from FY 2017-18 (AY 2018-19), this budget change is applicable from FY 2016-17 (AY 2017-18) onwards

For Goods Transport Agency

1 t is applicable only to small goods transporters who own not more 10 goods carriages( anytime during the year)  and are in business of plying / hiring / leasing of goods carriage

2 In this Case, 7500 p.m. per vehicle is treated as Income.

Part of Month is treated as full month for Computation

 (Earlier, limit was 5000 p.m per vehicle for Heavy goods vehicle and 4500 for Other goods Vehicle)

Example

Truck Purchased on 1 April=7500*12=90000 p.a. is PGBP Income

Truck purchased on 1 Jan=7500*3=22500 p,a is PGBP Income (Jan to March are 3 months)

Truck purchased on 4 Jan=7500*3=22500 p,a is PGBP Income (Part of month is full month)

In case of old truck purchased in last year,=7500*12=90000 p,a is PGBP Income

3.This Section is for All Assessees including Companies and LLP