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Myth of Relaxing the Tax Audit Requirement for Small & Medium Enterprises (Amendments in Section 44AB)

Yesterday finance minister announced that GOI is increasing the threshold limit of Tax Audit for SMEs by 5 times i.e. From 1 crore to 5 crore.

This is of not much use as it comes up with a very tricky clause being that "receipts and payment made" during the year by said SMEs should not exceed five percent of total receipts or payments.

India is still cash base economy and majority of transactions happens in Cash only. And on SMEs and Retailers level, where there are "n" number of small transactions, cash is still the king and preferable mode of monetary exchanges.

It seems that this amendment is for promoting the cashless transactions and making economy more transparent and digital. However limit for cash transactions is too low and this is not going to help much to the SMEs and the economy.

Accountech

It's Union Budget and Finance Bill, 2020 today. We are really hoping for some really bold steps to bring the economy out of the current slowdown.

We believe, this slowdown which we are facing, is a result of major cleaning which is being done since 2014. However just to say that current slowdown is all due to cleaning, will be wrong as well.

Some rational decision making and managing the fiscal deficit is required. And yes, government needs to lay down an overhaul plan for GST as well, otherwise we are just some days away for a major recession.

Accountech