Hidden Tax Incentives
Government schemes for manufacturing and exports that most miss.
Most taxpayers stop planning after Section 80C (the ₹1.5 Lakh deduction). But the Income Tax Act is riddled with incentives designed to boost specific sectors. Unfortunately, many SMEs and professionals rely on standard filing practices and miss these "hidden" goldmines.
1. Presumptive Taxation (Section 44ADA)
This is a superpower for freelancers, doctors, lawyers, architects, and technical consultants.
If your gross receipts are up to ₹75 Lakhs (with digital receipts), you don't need to maintain detailed expense books or get audited. You can simply declare 50% of your turnover as profit.
The Freelancer Example
You save the hassle of proving expenses like laptop, internet, electricity etc.
2. Section 115BAB for Manufacturing
To compete with China and Vietnam, India introduced one of the lowest corporate tax rates in the world for New Manufacturing Companies.
- Rate: 15% (plus surcharge/cess).
- Condition: Company must be incorporated after Oct 2019 and commence production before March 2024 (extended).
- Benefit: Much lower than the standard 25% or 30% corporate rate.
3. Section 80JJAA (Employment Generation)
If your business is growing and hiring, the government pays for it.
For every new additional employee hired (earning less than ₹25k/month), you get a deduction of 30% of their salary cost for 3 consecutive years. This is over and above the actual salary expense you claim in P&L.
4. RoDTEP for Exporters
While not part of the Income Tax Act, the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme refunds embedded central, state, and local duties/taxes that were not refunded. This directly boosts the bottom line of exporters by 0.5% to 4.3% of FOB value.