Sitharaman enhances presumptive taxation limits for MSMEs, certain professionals
Feb 1, 2023
Micro enterprises with a turnover of up to Rs 2 crore and certain professionals with a turnover of up to Rs 50 lakh can avail the benefit of presumptive taxation.
Finance Minister Nirmala Sitharaman on Wednesday announced a slew of measures for small businesses, including enhancing presumptive taxation limits for MSMEs and certain professionals with turnover of up to Rs 2 crore and Rs 50 lakh, respectively.
“MSMEs are the growth engines of our economy,” Sitharaman said. "Micro enterprises with a turnover of up to Rs 2 crore and certain professionals with a turnover of up to Rs 50 lakh can avail the benefit of presumptive taxation. I propose to provide enhanced limits of Rs 3 crore and Rs 75 lakh, respectively, to taxpayers whose tax receipts are no more than 5% of total receipts. Moreover, to support MSMEs in timely receipt of payments, I propose to allow deductions for expenditure incurred on payments made to them only when payments are actually made."
Sitharaman had also announced a Rs 9,000-crore corpus for revamped credit guarantee scheme. She said the revamped credit guarantee scheme would be effective April 1, 2023.
"Last year, I proposed extending the credit guarantee scheme for MSMEs. I am happy to announce that the revamped scheme will take effect from April 1, 2023, through an infusion of Rs 9,000 crore in the corpus,” the Finance Minister said in Parliament.
The infusion is expected to enable additional collateral-free guaranteed credit of Rs 2 lakh crore and reduce cost of credit by 1%.
According to the Economic Survey 2022-23 tabled in Parliament on Tuesday, the recovery of India's micro, small and medium enterprises was advancing swiftly, with the Emergency Credit Linked Guarantee Scheme offsetting the impact of the COVID shock on the units through robust credit disbursement.
Meanwhile, it is Sitharaman’s fifth straight budget. It will also be the final full budget of the second Modi govt before the next parliamentary elections in 2024.
[The Economic Times]