What are the Benefits of the Presumptive Tax Scheme?
While you ponder on taking this scheme up, here are some benefits you should know about:
a) You can file an Income Tax return form ITR-4 - which is a much more straightforward process - rather than ITR-3, which is generally confusing.
b) You will be able to manage the government forms alone, without paying an accountant.
c) Usually, there are very few costs to declare for a doctor as you have to , announce half of the income as a benefit and equilibrium as cost. Hence, you can save a great deal that you would otherwise pay as taxes.
The advantage of Presumptive Tax Scheme does not end with no mandate of maintaining records. The penalty under Section 271B of the Income Tax Act, 1961, is also not applicable to you. This can help you save some money that you would have paid as a fee to a Chartered Accountant or an inspector.
While not keeping up books of record could be one of the advantages of presumptive tax assessment, it does not help if you want to know and record your losses and gains.
Likewise, the restricting factor of this scheme is that there is no guarantee of the costs and allowances from your income. Thus, it becomes difficult to differentiate between the losses and gains you earn from your medical practice and any other freelance work that you might be doing.
