Incentives to Encourage Cashless Business Transactions



Quick Summary
The article explains how the Indian government incentivises businesses to adopt cashless transactions through Section 44AD of the Income Tax Act. By receiving payments via account payee cheque, bank draft, ECS, or other prescribed electronic modes, businesses can declare their income at a lower presumptive rate of 6% of turnover, compared to the standard 8% for cash receipts. This initiative aims to promote a less-cash economy and offers significant tax savings for small traders and businesses.

A. Presumptive Rate of Income: The presumptive rate of income would be 8% of total turnover or gross receipts. However, Proviso to sub-section (1) provides that the presumptive rate of 6% of total turnover or gross receipts will be applicable in respect of amount which is received By
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