Does a trader enjoy separate income tax exemption limit?

 









There is no distinction as far as the threshold limit for payment of income tax is concerned whether you are a salaried person or a trader. The only distinction is based on age. For all the persons who are or have completed 60 years of their age during the year, the threshold limit is 3 lakhs whereas for those below this threshold it is 2.50 lakhs per annum. For those who have completed 80 years of age as on 31st March, the basic exemption limit is 5 lakhs.

As there is no distinction between trader and other categories tax payers, a trader also will have to file his return of income if his total aggregate of all his income before deduction of item like PF, NSC PPF, LIP, repayment of housing loan, mediclaim premium etc. is above the minimum threshold limit mentioned above. Due date for filing of return is generally 31st July which has been extended till 31st December 2021 this year in case your accounts are not required to be audited.

Please note that if the total turnover of the trader exceeds specified limits during the financial year, the trader has to get his accounts audited from a Chartered Accountant and obtain an audit report before one month of due date of filing of the ITR. A trader has to offer income as a certain specified percentage of his turnover. However, if his net profit are lower than the specified percentage of the turnover, he has to get his accounts audited even if his turnover is below the specified limits. Please note that this year 15th February is the last date for filing of an ITR for the trader in case his accounts are required to be audited.

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