Soon the department of income tax should continue to share with the Ministry of MSME details on micro-, small- und medium-sized companies’ depreciation, turnover and gross revenue. The Central Board of Direct Taxes (CBDT) has instructed the Director General of Income Tax (Systems) to exchange details with the MSME Ministry.
Section 138 of the Income Tax Act encourages income tax authorities to exchange data / particulars of their taxpayers with certain government departments, when may be told.
The details to be exchanged covers depreciation on plant and equipment as recorded in ITR3, 5 and 6, sales / total market receipts as stated in ITR-3, 5 and 6; and profit turnover / gross receipts as recorded in ITR-4.
“To facilitate the process of the distribution of information, the Principal Director General of Income Tax (Systems) shall enter into a Memorandum of Understanding (MoU) with the Notified Authority of the Ministry of MSME, Government of India, which shall include, inter alia, the mode of transmission of data. Privacy, data management system, weeding after use, etc,” the CBDT or CBDT.
Nangia & Co LLP Partner Shailesh Kumar said that, last month , the government declared new requirements for qualifying as MSME focused on expenditure in factory, equipment and turnover.
“Vide present order read with Notification No 48 of 2020 released by the CBDT, nodal officials shall be assigned to both the Ministry of MSME and the Department of Income Tax, so that the details sought by the Ministry of MSME concerning the investment / return of the company to designate it to be a qualified MSME can be derived directly from the Department of Income Tax,” he added.
The Aatmanirbhar Bharat package proposed a revision of the MSME concept on 13 May. According to the updated concept, an undertaking is a micro-enterprise where the expenditure in plant and machinery or facilities does not exceed 1 crore and the turnover does not exceed 5 crore. A limited business is one in which the spending in plant and machinery or facilities does not surpass 10 crore and the revenue does not exceed 50 crore.
To medium-sized companies, as per the new definition, the expenditure in plant and machinery or facilities should not reach ₹50 crore and the revenue should be below ₹250 crore.
