Small business relief

Small business relief consists of tax measures that ease the financial obligations of smaller enterprises. Governments introduce such provisions to help these firms manage their tax responsibilities more effectively, strengthen their cash position, and promote further investment. These measures can take the form of preferential tax rates, increased deduction limits, simpler filing requirements, or exemptions from selected taxes. Because small firms often operate with tighter budgets, these forms of relief can play an important role in helping them remain viable and competitive.

Example : Under Section 44AD of the Income Tax Act, small businesses with annual turnover not exceeding ₹2 crore may choose the presumptive taxation option. Instead of computing actual profits, they declare a fixed percentage of turnover—8%, or 6% in the case of digital receipts—as their taxable income. Businesses adopting this scheme are not required to keep exhaustive accounting records and are generally spared from undergoing a tax audit.