Businesses with turnover up to Rs 2 crore will have to pay less tax on electronic payment receipts as compared to on receipts/payments received in cash. For businesses with turnover up to Rs 2 crore, it has been decided to reduce the existing rate of deemed profit of 8% under section 44AD of the Income Tax Act to 6% in respect of the amount of total turnover or gross receipts received through banking channel / digital means for the financial year 2016-17, according to a press release from the Central Board of Direct Taxes here today. However, the existing rate of deemed profit of 8% referred to in section 44AD of the Act, shall continue to apply in respect of total turnover or gross receipts received in cash, the release clarifies.
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