Dear Finance Minister,
Regarding – Presumptive Income Scheme – Income from Profession
In present Budget 2016 – 17, you rightly made a proposal for a presumptive Income Scheme by introduction of Section 44ADA in the Income Tax Act, 1962. This proposal is based on recommendations of “Income Tax Simplification Committee” constituted by Central Government under the chairmanship of Justice R. V. Easwar, Former Judge of the Delhi High Court and Former President of the Income Tax Appellate Tribunal.
The simplified presumptive taxation scheme is extended to persons earning professional income. According to government, this scheme will help to rationalize the presumptive taxation scheme and to reduce the compliance burden of the small tax payers having income from profession and to facilitate the ease of doing business.
A new Section 80CCG has been inserted into Indian Income Tax Act by the Finance Act 2012 with effect from 1st day of April 2012. This means this action is applicable for previous year 2012 – 13 and assessment year 2013 – 14.
This Section 80CCG of Indian Income Tax Act, 1961 allow a deduction of fifty percent of amount invested in equity shares up to amount of Rs. 50,000.oo (Rs. Fifty thousand only) in a previous year as par a scheme called Rajiv Gandhi Equity Saving Scheme, 2012. Even though this law and scheme is targeted to attract small investors to capital market, political analyst think timing of this scheme aiming for next general election scheduled to be held in year 2014.