New Delhi, Feb 1 (PTI) The government today proposed to tweak the presumptive taxation norms for large transporters as the existing one has failed to generate the anticipated response.
In his Budget, Finance Minister Arun Jaitley proposed that an income of Rs 1,000 per tonne per month in respect of heavy goods vehicles of more than 12 tonnes would be presumed for the purpose of taxation.
Currently, the profits and gains are deemed to be an amount equal to Rs 7,500 per month for each goods carriage or the amount claimed to be actually earned by the assessee, whichever is higher.
The current presumptive income scheme is applicable uniformly to all classes of goods carriages irrespective of their tonnage capacity.
The only condition which needs to be fulfilled is that the assessee should not have owned more than 10 goods carriages at any time during the previous year.
"Even though the profit margins of large capacity goods carriages are higher than small capacity goods carriages, the tax consequences are similar which is against the principle of tax equity," said the budget document.
The budget has now proposed to amend the Income-tax Act to provide that "in respect of heavy goods vehicles (more than 12 tonnes), the presumptive income under section 44AE of the Act shall be computed at the rate of Rs 1,000 per tonne per month".
The vehicles other than heavy goods vehicle will continue to be taxed as per the existing rates.
In his Budget Speech, Jaitley said the government had liberalised the presumptive income scheme for small traders and entrepreneurs with the hope that there would be significant increase in compliance.
"However, the turnover shown is still not encouraging," he said, adding the tax compliance behaviour of professionals is "no better". PTI NKD CS MR
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