Opt for presumptive tax scheme only if you can adhere to its rules

Higher limits are positive, but remember you must stick to scheme for 5 yrs

To ease compliance and promote non-cash transactions, Budget 2023 has proposed to increase the threshold limits for the presumptive taxation scheme (PTS). Under this scheme, the taxpayer is required to pay tax on the basis of presumptive income, calculated as a percentage of turnover. The taxpayer doesn’t have to maintain detailed books of accounts and calculate the financial year’s actual profit or loss.

While Section 44AD of the Income-Tax (I-T) Act applies to small businesses, Section 44ADA applies to small professionals. Bharath Gangadharan, Senior Associate, SKV Law Offices, says, “Small businesses, certain professionals, self-employed individuals, and freelancers are eligible to