Does Presumptive Scheme and AMT and SEZ conflict each other on Income tax calculation

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Rajesh

entrepreneur

27 Points Joined January 2023

If someone adopted a Presumptive taxation and having a turnover of less than 2 crores and having 30 lakh profit then do AMT will interfere with tax computation presumptive rate ?

1) If calculated the Normal way on a normal tax slab of 30 Lakh then 6,63,000 is tax liability

2) If using AMT 15% of 30 Lakh then 4,50,000 (so normal tax is higher so 6,63,000 will be considered as AMT)

3) If followed Presumptive Scheme 0 because 6% of 30 Lakh is non-taxable

So what tax liability will be considered ?

And if I am generating this income from the special economic zone (10AA)? Does this mean that even if my income will entitle to 100% tax-free but still due to AMT rule I have to Pay tax?

Replies (4)

CA Susheel Gupta

CA LLB

72 Points Joined January 2009

AMT rate is 18.50% plus surcharge and cess

For Presumptive taxation - profit will be calculated @ 6% of turnover and will be 12 Lakh

Yes AMT is payable even if deduction u/s 10AA is claimed

Rajesh

entrepreneur

27 Points Joined January 2023

Hello Susheel Gupta, I am Garg,

I am asking a simple question if someone adopted Presumptive taxation then even if his actual earning is 30 Lakh on a 2 crore turnover still his profile will be considered 12 Lakh and so No AMT apply on it or AMT will be used as the actual profit was 30 Lakh ?

Another thing is, if running a business from SEZ then no income tax so why AMT applies on SEZ-based businesses and if it applies then there is no big benefit to running a business from SEZ.?

Ashlch

2 Points Joined January 2023

If the income is generated from a special economic zone (SEZ) and is entitled to 100% tax-free status, the AMT rule would not apply and the income would not be subject to tax. However, it's important to note that the tax treatment of income generated from an SEZ may vary depending on the specific circumstances and it's always a good idea to consult spider solitaire 2 suit with a tax professional for more specific guidance.

Rajesh

entrepreneur

27 Points Joined January 2023

Ok does this mean that according to AMT first pay the tax and then after get a refund of all paid amount against tax using 10AA if you are running a business from SEZ ?

Correct me if my understanding is wrong