Quick Summary
Small businesses often operate with limited resources, which makes tax planning an important part of managing day-to-day finances. For Tax Year 2026-27, the Income Tax Department has outlined a range of benefits available to small businessmen and professionals under the Income-tax Act, 2025, as amended by the Finance Act, 2026. These provisions cover everything from presumptive taxation and business deductions to TDS relief, advance tax and exemptions. For eligible taxpayers, choosing the right
Daily Limit Reached
You have reached your daily limit of 2 Free News
Subscribe to CCI PRO for unlimited access
Why Upgrade to CCI PRO?
- No Ads
- WhatsApp Community
- Daily E-Newsletter
- Unlimited News Access
- Profile Visitors
- Link Social Profiles
- Featured Job Posts
- Pro Badge
- Expert GST Guidance
- Unlimited Forum Replies
- Download Content in PDF
1 Year PLAN
1999
(Excl. of GST ₹359)
2 Years PLAN
3499
(Excl. of GST ₹629)
BEST VALUE
3 Years PLAN
4999
(Excl. of GST ₹899)
View all CCI PRO benefits
Already a PRO member? Login here for an ad-free experience. 07941056694
FAQ :
Presumptive taxation allows eligible small businesses with turnover up to £2 crore to calculate income at 8% of gross receipts (or 6% if paid electronically). For professionals, it's 50% of gross receipts up to £50 lakh, with higher thresholds available if cash receipts are minimal.
Small businesses can deduct expenses like rent, taxes, repairs for business premises and machinery, insurance premiums, employee bonuses, interest on business loans, employer contributions to provident and superannuation funds, and bad debts, provided they are incurred wholly and exclusively for business purposes.
Yes, eligible taxpayers can claim a deduction of 30% of additional employee costs for the first three tax years. Eligible start-ups can claim a 100% deduction on profits for three consecutive years out of ten, provided they meet criteria like incorporation date and turnover limits.
TDS is generally required on payments to contractors only if an individual payment exceeds £30,000 or aggregate payments exceed £1 lakh. For individuals or HUFs, the TDS rate is 1%. Specific exemptions and higher thresholds also apply for certain small taxpayers and transactions.
Yes, partnership firms can deduct eligible interest, salary, bonus, commission, or remuneration paid to partners, subject to specific conditions and limits, including a 12% per annum ceiling on simple interest.
Books of accounts may be required if turnover exceeds specific limits. A tax audit generally applies if business turnover exceeds £1 crore or professional receipts exceed £50 lakh, though higher thresholds exist for businesses with low cash transactions. Certain presumptive tax users are exempt.
CAclubindia
