To promote digital payment, the ministry of finance vide press release December 19, 2016 announced reduction in existing rate of deemed profit to 6% of turnover, for payment received through banking channels / digital means.
I run a small garment shop. I hear there is some tax benefit for receiving payments via digital modes. What is the tax benefit and from which year is it applicable?
Earlier, a trader (i.e. an individual, HUF or a partnership firm other than LLP) carrying on any business (other than transportation, agency, brokerage and commission) with a total annual turnover of Rs 2 crore or less, could pay income tax presuming 8% of the turnover as his profit under section 44AD. To promote digital payment, the ministry of finance vide press release December 19, 2016 announced reduction in existing rate of deemed profit to 6% of turnover, for payment received through banking channels / digital means. However, existing rate of 8% continues to apply for total turnover received in cash. This benefit of lower rate of deemed profit on digital turnover is applicable for financial year 2016-17. Thus, if you are receiving payments through cheque or digital means, you can claim the above tax benefit provided you satisfy all other conditions.
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I claimed capital gain tax exemption a few years ago. But the tax officer adopted stamp duty valuation under Section 50C and increased amount of capital gain. However, there is no actual tax liability as there are losses under other heads of income. The matter is pending before CIT (A).Can I opt for dispute settlement scheme?
The Direct Tax Resolution Scheme is applicable to cases where there is disputed tax. In your case, there is no disputed tax. It is a case where only loss gets reduced. Thus, you are not eligible to avail this scheme.
The writer is founder of RSM Astute Consulting Group
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