BY CA Manoj Kohli, 20th July. Presumptive income taxation is employed primarily in economies where ‘hard-to-tax’ taxpayers are the majority of the population, and administrative resources are scarceA Budget proposal that has created a lot of attention, interest and excitement among the small businesses is the presumptive taxation scheme. The Finance Bill, 2009, seeks to extend the scheme to all businesses with gross receipts not exceeding Rs 40 lakh; at present, the presumptive scheme is available to three businesses, viz. civil construction, retail trade and transportersUnder the proposed changes, businesses with revenues of up to Rs 40 lakh will now have the option to declare income at 8% of their turnover and also be exempt from compliance procedures such as maintaining books of accounts. Moreover, they will be allowed to pay the entire tax liability from their businesses only at the time of filing Tax returns and not in advance.
I too have the same query .
Can the assesse take umbrage under presumtive tax scheme
Please any one can respond .
An assessee is in the buisness of earning commissin by selling financial products. 90% of such receipts are profits, as the administrative overheads, being the only expense do not exceed 10% of the receipts.
if the receipts are less than 60 Lakhs, say 50 lakhs, can the assessee take umbrage under the presumptive taxatin, show his taxable income as Rs.4 lakhs and pay tax thereon? This is inspite of the fact that the actual profits are more than 10 times the presumed profit?