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Income Tax Dept, Ministry join hands to check and classify MSMEs

Our Bureau New Delhi | Updated on July 21, 2020

In order to identify entities eligible to be categorised as Micro, Small and Medium Enterprises (MSMEs), the Central Board of Direct Taxes on Monday signed memorandum of understanding with MSME Ministry.

CBDT is the apex policy making for Corporate Tax and Personal Income Tax.

The MoU will facilitate seamless sharing of certain Income-tax Return (ITR) related information by the Income Tax Department to MSME Ministry. This data will enable the Ministry to check and classify enterprises in Micro, Small and Medium categories as per the criteria notified in the Notification dated June 26.

According to this notification, the definition of micro manufacturing and services units was increased to ₹ 1 crore of investment and ₹5 crore of turnover. The limit of small unit was increased to ₹10 crore of investment and ₹50 crore of turnover. Similarly, the limit of medium unit was increased to ₹20 crore of investment and ₹100 crore of turnover which was later revised to ₹50 crore of investment and ₹250 crore of turnover. It is expected that with this new classification, nearly 99 per cent of corporate assessee can be MSME.

The MoU comes into force from the date it was signed. Both the organisations will appoint Nodal Officer and Alternate Nodal Officers to facilitate the process of data exchange.

Published on July 20, 2020

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