LATEST TAX UPDATE
Presumptive Tax:
Bank & Stock Reporting Now Mandatory
The Income Tax Department has shifted toward 100% transparency. Effective April 1, 2026, the "no-books" era for small businesses under Section 44AD is evolving into a system of verified accountability.
1. Required Financial Data
Schedule E21
Bank Balances
Total of all savings/current accounts.
Total of all savings/current accounts.
Schedule E22
Cash Position
Physical cash held at business premises.
Physical cash held at business premises.
Schedule E19
Stock Value
Unsold inventory and raw materials.
Unsold inventory and raw materials.
E20 & E15
Trade Balances
Sundry Debtors and Creditors.
Sundry Debtors and Creditors.
2. Scope of Applicability
Limit: Business turnover up to ₹2 Crore (Non-digital).
Digital Incentive: Limit enhanced to ₹3 Crore if 95% of receipts are electronic.
3. The AIS Risk Factor
CRITICAL: Your E21 Bank Balance must reconcile with your Annual Information Statement (AIS). If the numbers don't match, the "Smart Tax System" will generate an automated inquiry notice immediately.
4. Critical Filing Dates
| Category | Deadline |
|---|---|
| Salaried / ITR-1 | July 31, 2026 |
| Business / ITR-4 | AUGUST 31, 2026 |
💡 The August 31st extension for ITR-4 is provided specifically to allow for accurate bank reconciliation.
FAQs
Do I need to maintain full double-entry books?
No. While you don't need a full P&L, you must maintain evidence for the five balance sheet items reported.
What if my cash receipts exceed 5%?
Your turnover limit for presumptive taxation will remain at ₹2 Crore instead of the enhanced ₹3 Crore.
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