The threshold of turnover for small businesses that can opt for the composition scheme, has been increased to Rs 75 lakh from Rs 50 lakh. Now traders, manufacturers and restaurant owners with turnover below Rs 75 lakh can opt for the composition scheme and pay taxes at 1, 2, and 5 per cent rates, respectively. Finance minister Arun Jaitley said there were two objectives behind lowering the threshold - to try to maintain revenue neutrality as far as possible, while easing the taxes on small businesses and encourage such entities as they helped to create jobs. Small businesses with a turnover up to Rs. 20 lakh need not pay tax.
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