The Income Tax Act has a clause for presumptive taxation for a threshold limit of Rs. Two Crores for business. But the intention is defeated by lower limits in indirect taxes. Various Limits are as under:
VAT: Rs. 5 lacs to Rs. 10 lacs (different in different states)
Service Tax: Rs. 10 lacs
Excise Duty: Rs. 1.50 crores.
It is clear from the limits set by various indirect taxes is well below the limits for presumptive rates by income tax.
Let us see, the practical side. Limit of Rs. 10 lacs for VAT. Assuming a profit of 10%, it will be Rs. 1 lac per annum. This means it will be less than Rs. 10000/- per month. Should a man earning less than Rs. 10000 a month be subject of paying taxes. It is high time, there is public discussion on this and a reasonable limits set instead of making all small business people thief.
VAT: Rs. 5 lacs to Rs. 10 lacs (different in different states)
Service Tax: Rs. 10 lacs
Excise Duty: Rs. 1.50 crores.
It is clear from the limits set by various indirect taxes is well below the limits for presumptive rates by income tax.
Let us see, the practical side. Limit of Rs. 10 lacs for VAT. Assuming a profit of 10%, it will be Rs. 1 lac per annum. This means it will be less than Rs. 10000/- per month. Should a man earning less than Rs. 10000 a month be subject of paying taxes. It is high time, there is public discussion on this and a reasonable limits set instead of making all small business people thief.
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