Finance Minister Arun Jaitley has said that small traders and businesses with a turnover of up to 2 crore rupees will pay less tax if they accept payments through banking and digital means. Speaking to reporters in New Delhi yesterday, he said, in 2016-17 budget, small traders and businessmen, with turnover of up to 2 crore rupees who did not maintain proper accounts, were presumed to have earned 8 per cent income or profit for tax purposes. <br/><br/>But if they use digital modes of payments, their income will now be presumed to be 6 per cent of the turnover and not 8 per cent.<br/> Earlier in the day, the CBDT in a communication said it has been decided to reduce the existing rate of deemed profit of 8 per cent under section 44AD of the Act to 6 per cent in respect of the amount of total turnover or gross receipts received through banking channel/digital means for the financial year 2016-17. <br/><br/>However, the existing rate of deemed profit of 8 per cent referred to in section 44AD of the Act, shall continue to apply in respect of total turnover or gross receipts received in cash, the tax department added.<br/> The decision has been taken to achieve the government's<br/>mission of moving towards a less cash economy and to<br/>incentivise small traders/businesses to proactively accept<br/>payments by digital means.<br/> '''''''<br/>

Small traders & businesses with turnover of up to Rs 2 Cr will pay less tax if they accept payments through digital means: Jaitley<br/><br/>'Finance Minister Arun Jaitley has said that small traders and businesses with a turnover of up to 2 crore rupees will pay less tax if they accept payments through banking and digital means. Speaking to reporters in New Delhi yesterday, he said, in 2016-17 budget, small traders and businessmen, with turnover of up to 2 crore rupees who did not maintain proper accounts, were presumed to have earned 8 per cent income or profit for tax purposes. <br/><br/>But if they use digital modes of payments, their income will now be presumed to be 6 per cent of the turnover and not 8 per cent.<br/> Earlier in the day, the CBDT in a communication said it has been decided to reduce the existing rate of deemed profit of 8 per cent under section 44AD of the Act to 6 per cent in respect of the amount of total turnover or gross receipts received through banking channel/digital means for the financial year 2016-17. <br/><br/>However, the existing rate of deemed profit of 8 per cent referred to in section 44AD of the Act, shall continue to apply in respect of total turnover or gross receipts received in cash, the tax department added.<br/> The decision has been taken to achieve the government's<br/>mission of moving towards a less cash economy and to<br/>incentivise small traders/businesses to proactively accept<br/>payments by digital means.<br/> '''''''<br/>