Income Tax Turnover Definition

Turnover tax is at a very low rate compared to most taxes but is without any deductions.

Income tax turnover definition. Sales tax occurs when merchandise has been sold. By law taxpayers must file an income tax return annually to. The aggregate amount for which sales are effected or services rendered by an enterprises. Income tax is a type of tax that governments impose on income generated by businesses and individuals within their jurisdiction.

The term turnover has not been defined under the income tax act 1961. Businesses that elect to pay the turnover tax are exempt from vat. Your aggregated turnover is your annual turnover all ordinary income you earned in the ordinary course of running a business for the income year plus the annual turnover of any entities you are connected with or that are your affiliates. These types of entities are called micro businesses.

In the guidance note on terms used in financial statements published by icai the expression sales turnover has been defined as. Every person being a seller who receives any amount as consideration for sale of any goods of the value or aggregate of such value exceeding fifty lakh rupees in any previous year other than the goods covered in sub section 1 or sub section 1f or sub section 1g shall at the time of receipt of such amount collect from the buyer a sum equal to 0 1 of the sale consideration exceeding fifty lakh rupees as income tax. Turnover tax is a simplified tax system only available to sole proprietors partnership s companies or close corporations with a qualifying turnover of less than r1m per year. The turnover tax system replaces income tax vat provisional tax capital gains tax and dividends tax for micro businesses with a qualifying annual turnover of r 1 million or less.

Turnover tax is a simplified system aimed at making it easier for micro business to meet their tax obligations. According to section 2 91 of companies act 2013 as amended by the companies amendment act 2017 turnover means the gross amount of revenue recognised in the profit and loss account from the sale supply or distribution of goods or on account of services rendered or both by a company during a financial year.