Best ways to save tax for shopkeepers & retailers

If your turnover is within Rs 2 crore (Rs 3 crore where cash receipts are 5% or less), Section 44AD lets you declare 8% of turnover (6% on digital receipts) as income with no audit and no detailed books. For most small shops this is both simpler and lighter on tax — and the 6% rate rewards digital collections.

If your real margin is below the presumptive rate, keep books and claim all genuine costs — cost of goods, shop rent, staff wages, electricity, packaging, transport and depreciation on fittings and equipment. Low-margin retailers often save more on actual books.

Under 44AD the presumptive rate drops from 8% to 6% on receipts through banking and digital channels, so accepting UPI and card payments can directly lower your declared income — and keeps cleaner records too.

Salary to a spouse or family member who genuinely works in the shop is a deductible expense and can shift income to a lower slab — provided it's real, reasonable and documented, with TDS where applicable.

On your personal return, use 80C up to Rs 1,50,000, the Rs 50,000 NPS and 80D health insurance in the old regime. With no TDS on business income, pay advance tax in the four instalments if your tax exceeds Rs 10,000, to avoid 234B/234C interest.