Major Changes for Businesses and Professionals
The New Income Tax Bill 2025 proposes several crucial adjustments aimed at improving compliance, rationalizing taxation, and offering relief to small enterprises.
Adjustments to Presumptive Taxation (Sections 44AD/44ADA)
The Bill brings significant relief and clarity for small businesses and independent professionals operating under the presumptive taxation scheme.
Increased Turnover Thresholds: The turnover limit for businesses opting for Section 44AD (Presumptive Taxation for Small Businesses) has been raised from โน2 Crore to โน3 Crore, provided their cash receipts do not exceed 5% of their total turnover.
Relief for Professionals (Section 44ADA): For professionals (like doctors, lawyers, and CAs) opting for presumptive taxation under Section 44ADA, the gross receipts limit has been increased from โน50 Lakh to โน75 Lakh, subject to the same condition of limited cash receipts.
Actionable Insight: This amendment significantly benefits the growing community of freelancers and consultants, allowing more professionals to avoid maintaining detailed books of accounts.
Rationalization of TDS and TCS Provisions The focus of the Bill is to simplify the complex web of Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) provisions for businesses.
TDS on Rent above a Higher Threshold: The threshold limit for TDS on rent (Section 194-I) has been rationalized. The rate and the threshold have been adjusted to focus reporting requirements on larger transactions only. (Note: Specific rate and threshold changes should be added here once the final bill details are out, e.g., the threshold is now โน3,00,000 per annum.)
Simplified E-commerce Operator Compliance: The compliance burden on E-commerce operators regarding TCS (Section 194-O) is simplified, focusing on essential reporting while reducing redundant obligations for small vendors.
Incentives for Corporate Compliance and Digitalization To encourage faster adoption of digital record-keeping and corporate governance, the Bill proposes new incentives:
Faster Corporate Tax Filing: Businesses maintaining specified digital records may qualify for expedited processing of their Income Tax Returns, leading to quicker refunds.
R&D Deductions: Enhanced weighted deductions for specific research and development activities, aimed at boosting innovation within Indian corporate structures.















