Government Initiative of reducing deemed profits u/s 44AD of Income tax act, to promote digital payments

Exiting provision of section 44AD of the Income Tax Act. 1961-  In case of certain assesses carrying on any business (other than transportation, agency, brokerage and commission) and having a turnover of less than Rs 10 crore or less, the profit is deemed to be 8% of the total turnover.

New Provision- Now it has been decided to reduce the existing rates of deemed profits of 8% to 6% in respect of the amount of total turnover received through banking channel/ digital means for the financial year 20116-17. However, the existing rate of deemed profits of 8% shall continue to apply in respect of total turnover or gross receipts received in cash.

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