Deemed profit u/s 44 AD reduced from 8% to 6% for digital transaction

Deemed revenue u/s 44 AD minimized from 8% to 6% for digital deal. Steps for Promoting Digital Payments & Creation of Less Cash Economy. On Today (19-12-2916) Govt of India Decided to Lower Existing Rate of Deemed Revenue under area 44 ADVERTISEMENT of the Income Tax Act in regard of amounts/receipts through banking channel/digital means. Now inspect more information for “ Deemed profit u/s 44 AD lowered from 8% to 6% for digital deal” from below …

Government of India
Ministry of Financing
Department of Revenue
Central Board of Direct Taxes

New Delhi, 19 th December,2016 News Release

Under the existing arrangements of area 44 ADVERTISEMENT of the Income-tax Act, 1961 (the Act), in case of certain assesses (i.e. an individual, HUF or a partnership firm besides LLP) carrying on any business (besides transport, agency, brokerage and commission) and having a turnover of Rupees 2 Crore or less, the revenue is deemed to be 8% of the total turnover.

Also Read: Delhi Vat DVAT Registration Requirements and Procedure

In order to achieve the Government’s mission of moving towards a less cash economy and to incentivise small traders/ businesses to proactively accept payments by digital ways, it has been chosen to lower the existing rate of deemed revenue of 8% under area 44 ADVERTISEMENT of the Act to 6% in regard of the quantity of total turnover or gross receipts received through banking channel/ digital ways for the fiscal year 2016-17 The existing rate of considered revenue of 8% referred to in section 44 AD of the Act, shall continue to apply in respect of overall turnover or gross invoices received in money.

Legal change in this regard will be performed through the Financing Costs, 2017

( Meenakshi J. Goswami)
Commissioner of Income Tax
(Media and Technical Policy)
Official Spokesperson, CBDT.

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