India's New Tax Law: Small Businesses Face Audits for Low Presumptive Profits
India's Income-tax Act, 2025, now in effect from April 1, 2026, has introduced a significant new audit trigger for small businesses and professionals using the Presumptive Taxation Scheme. Previously, there was some confusion, but the new law explicitly mandates a tax audit if a business declares profits lower than the prescribed presumptive rates, provided their total income exceeds the basic exemption limit. This change brings greater clarity to tax compliance, but also potentially widens the audit net for many small enterprises.

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