The following is the article titled "Does America face a middle-age crisis—or existential?" by Narayan Ramachandran, reproduced from the sources:
Does America face a middle-age crisis—or existential?
By Narayan Ramachandran
America is 250 years old this year. It is tricky to establish a ‘nation-state’ equivalent of human years, but if I were to hazard a guess, then it would be about one nation-state year for every seven to ten human years. Broadly similar to the dog-human ageing relationship. Of course, dogs age unevenly with respect to humans, reaching a ‘human age’ of 24 in their first two years and then slowing down over the next decade plus. By this yardstick, the US today is middle-aged at most. There is no science behind this nation-state equivalence, only the backing of recorded history: great civilizations of the past often lasted a thousand years, a little more than 10 human lifespans by the aforesaid reckoner.
The Egyptian civilization was among the longest lasting; it endured from about 3000 BCE till its Roman annexation at the turn of [the era. The Ottoman Empire, which] conquered what’s now Istanbul, prevailed for about half a millennium. The Han dynasty in China held sway for nearly 400 years and the British Empire for about 350 years.
So, is America on its last legs, or is it going through a middle-age crisis, or simply a reset for a long innings ahead?. Like with the canine epigenetic clock, we must be careful in our analysis: this need not be a phase in which it ticks faster, as national ageing has no biological inevitability, nor would it be merely such a clock at work.
Before we evaluate America’s future, it is instructive to consider how the country got here. Alexis de Tocqueville, French philosopher and an early visitor to the US, made some incisive observations in his 1835 book, Democracy in America. He praised the US for its township self-government (a laboratory for democracy), its spirit of volunteerism, its free press as a check on power, and for its freedom of association as a counterweight to majority tyranny. He was most impressed by its practical, restless energy and work ethic, as also its cultural mores.
If Tocqueville had revisited America 150 [years later, he might have seen] majority tyranny and a strange “equality of conditions” brought about by a mass consumer culture. To this, I would add two things: first, that America in its period of ascendancy established a ‘high trust’ society as described by Francis Fukuyama in his book Social Virtues and the Creation of Prosperity; and second, that its ability to attract the best to its universities and its pathway for that talent to develop new technology and products for the world sustained its success. Vannevar Bush, in his 1945 policy recommendation to then president Harry S. Truman titled Science: The Endless Frontier, advocated federal investment in scientific research as the fund from which practical applications of knowledge must be drawn. That led directly to the creation of the National Science Foundation in 1950. This established the bedrock upon which is built a pillar of America’s great-[ness].
[In the recent] wave of globalization, it left some of its communities behind even as the world benefited. Its high-trust society was fractured in this process as described in Dan Rodger’s book, The Age of Fracture. A backlash in the context of low trust brought about its current political movement against globalization and towards putting up physical walls and technology barricades.
If Tocqueville were to assess America today, it is unlikely that he would pick up any strong signal on ‘free association’. As measured by interpersonal trust or trust in government, Fukuyama’s ‘high trust’ society no longer holds, as most recent surveys indicate. America’s incumbent president, Donald Trump, has been taking a chainsaw to research funding and has created fear even among legal migrants and students at its top universities.
The only US pillar left standing is its com-[petitiveness]. On the evidence of just these indicators, the country’s future looks cloudy. The living history of a people who form a nation, though, is subjective. To comprehend and evaluate whether they can regain their vitality, one must draw from periods of difficulty. So far, the US has shown remarkable resilience and bounced back from each. This is evident in periods such as the Great Depression of the 1930s, oil shock of the 70s, global financial crisis of 2008 and the more recent covid pandemic.
Historically, America’s greatest strength has been its ability to adapt and re-invent itself in the face of crisis. The country still possesses reservoirs of political talent and well-built institutions and mechanisms of democracy, apart from the personality traits required for a resurgence. In my view, US declinists are calling a fall prematurely. It does have deep challenges to overcome, such as societal polarization, an affordability crisis, lack of housing and healthcare for all, and excessive debt. Yet, American resilience should be able to combat them and emerge victorious.
The following is the article titled "Hotel rates soar but industry sees room for price increases" by Varuni Khosla, reproduced from the sources:
Hotel rates soar but industry sees room for price increases
Limited new supply and rising travel have pushed average room rates in India to record highs By Varuni Khosla
After several years of record-breaking room rates, India’s top hotel chains are pushing back against suggestions that they have reached their ceiling. Instead, hotel executives said the country’s premium hospitality market remains underpriced compared with global peers and is entering a phase where protecting room rates, rather than chasing occupancy, has become the dominant strategy.
“India is still significantly underpriced versus Europe, North America and many Asian luxury markets,” Vikramjit Singh Oberoi, managing director and chief executive officer (CEO) of EIH Ltd, which owns the Oberoi and Trident group of hotels, said on a recent earnings call. While luxury hotels globally now charge upwards of $1,000 (about ₹96,000) a night, India remains well below those levels, he added. Room rates at the Oberoi Hotel New Delhi hover between ₹20,000 and ₹30,000 per night, depending on the season.
After several years of strong demand, limited new supply and rising domestic travel pushed average room rates in India to record highs. Instead of discounting to fill rooms, luxury and five-star hotel operators say they are increasingly prioritizing pricing power.
The Leela’s average daily rates increased during the March quarter due to its “strong consumer pull, brand, pricing power and disciplined execution,” Anuraag Bhatnagar, CEO of the luxury hotel chain, said on the company’s fourth-quarter earnings call. “While occupancy in March took a hit due to international travel being disrupted, we continued to grow average daily rates in double digits,” he said. Bhatnagar said the company offset weaker occupancy with higher room rates, reinforcing what appears to be a broader shift across luxury hotels. He added that resilient demand, rising aspirational spending and constrained new luxury supply in the company’s key micro-markets continued to support improvements in both occupancy and pricing. At The Leela Palace New Delhi, rooms are priced from ₹39,000 to ₹55,000 this week, according to its website.
ITC Hotels reported that average daily rates (ADRs) for rooms continued to rise despite a volatile operating environment. External factors “created temporary fluctuations in demand, which briefly affected occupancy levels; however, ADRs witnessed a year-on-year growth, supported by smart revenue management and value-based offers,” the company said in its annual report for fiscal year 2026 (FY26). ADRs rose 6% during the year, while occupancy expanded by 229 basis points, resulting in a 10% increase in revenue per available room (RevPAR). ITC Hotels also maintained a RevPAR premium of 37% over the industry average.
Nikhil Sharma, managing director and chief operating officer, South Asia, Radisson Hotel Group, said the industry had entered a more mature phase where pricing was increasingly driven by the quality of experiences. “Demand remains robust across business and leisure destinations,” he said, adding that occupancy across Radisson’s India portfolio increased by around 5% this summer from a year earlier. “Sustainable growth will be driven by differentiated experiences that guests genuinely value and are willing to pay for, rather than by occupancy or room rates alone.”
Hospitality consultant Vijay Thacker, managing director of Horwath HTL, said recent softness in rates in some markets on account of geopolitical reasons should not be interpreted as a sign that luxury pricing has peaked. “We cannot look at a short window of time for the luxury sector. You need to take a medium- to long-term perspective. For the quality of the product and service that India offers, we are underpriced,” he said.
While some luxury hotels may eventually reach optimal occupancy, pricing will increasingly become the main lever for growth. “Once occupancy reaches a certain level, then it’s a rate game,” Thacker added. Branded hotel supply is expected to rise to about 300,000 rooms by FY30 from 196,464 rooms in FY25. Developers are betting heavily on the premium end of the market, with luxury hotels accounting for about 21% of the upcoming branded room pipeline, according to hotel consultancy Hotelivate-Savills.
RATE RACE (SIDEBAR)
- ROOM rates at the Oberoi Hotel New Delhi hover between ₹20,000 and ₹30,000 per night.
- ITC Hotels reported that ADRs continued to rise despite a volatile operating environment.
- INDIA’S luxury resorts remain undervalued relative to destinations overseas.
- HOTEL stocks usually advance during economic booms, when consumption rises.
The following is the article titled "A quarter-trillion-dollar onslaught of AI bonds tests limits" by Sam Goldfarb, reproduced from the sources:
A quarter-trillion-dollar onslaught of AI bonds tests limits
Tech giants are borrowing even more than expected, weighing on bond prices. By Sam Goldfarb
Wall Street is sending a message to tech companies engaged in a historic borrowing spree to fund investments in artificial-intelligence infrastructure: for pity’s sake, please slow down.
Over the past several weeks, the investment-grade corporate bond market has struggled to absorb a combined $75 billion of bond issuance from Nvidia, SpaceX and Amazon. While Nvidia and SpaceX were able to borrow at reasonably low interest rates, their newly issued bonds quickly slumped in the secondary market, disappointing investors who often like to flip such bonds. Amazon, meanwhile, had to pay unusually steep rates by its standards to complete its debt sale, reflecting investors’ newfound caution.
For the most part, those investors say they aren’t particularly worried about the tech companies' creditworthiness. The problem instead is that they fully expect those hyperscalers to continue flooding the market with new bonds. The hyperscalers are in such a heated race for computing power that they appear prepared to issue tens of billions of dollars of bonds at any moment, regardless of market conditions and whether they might need to pay higher interest rates.
“For us, it’s all we’re talking about, and for them it’s like, ‘Oh yeah, you know, we hit the bond market,’” said Ryan Jungk, investment grade corporate sector co-head at Newfleet Asset Management. “They don’t necessarily care if they’re flooding our market”.
“Everyone wants to leave some room for the next deal,” said Travis King, head of investment-grade corporates at Voya Investment Management.
The recent weakness in hyperscaler bonds is a big deal for fund managers and investors, because investment-grade corporate bonds tend to be fairly stable. That means even modest price declines can make a major impact on a fund’s performance relative to its peers. And it isn’t clear that hyperscalers are going to change their behavior anytime soon.
Six companies that bond investors consider hyperscalers—Alphabet, Amazon, Meta, Oracle, Nvidia and SpaceX—have already issued around $244 billion in bonds globally this year, up from $108 billion all of last year and $17 billion in 2024.
Investors entered the year knowing that hyperscalers were going to issue a lot of bonds. The extra yield, or spread, that investors demanded to hold the companies’ existing bonds over U.S. Treasurys had already increased accordingly, and demand was relatively strong for new bond sales during the first few months of the year.
As it turns out, however, companies are spending and borrowing even more than investors had anticipated. Many investors were especially caught off guard by Nvidia’s $25 billion bond sale in June and again last week by Amazon’s issuance of the same size, fueling a jump in bond spreads across all of the hyperscalers.
The spread of Alphabet’s 10-year bonds rose 0.12 percentage point last week, while Meta’s 10-year bond spread climbed 0.16 percentage point. The average investment-grade bond spread ticked up only 0.02 percentage point.
As a first-time bond issuer, SpaceX has presented a particular challenge, with investors uncertain over how its bonds should be priced. The spread of its 10-year bonds has leapt nearly half-a-percentage point since being issued on June 23.
John Lloyd, global head of multi-sector credit at Janus Henderson, said his team has long believed that companies would spend more on AI infrastructure this year than the consensus estimate, leading them to hold fewer hyperscaler bonds than benchmark indexes. Going forward, he said, “you still have a wide range of outcomes” for how much the companies will invest in AI, with high-end estimates coming in north of $10 trillion over the next several years.
Moves in tech company bond prices are now especially important to portfolio managers, because those bonds make up an increasingly large share of benchmark bond indexes. If investors are spooked by the threat of further issuance and go “underweight” tech bonds, they could get burned if issuance is less than expected and the bonds rally. Conversely, they could get hurt if they start buying up the bonds and issuance doesn’t let up.
“If you get the tech trade wrong, that probably makes or breaks your year,” said Jungk.
If borrowing costs rise, tech giants such as Amazon, Alphabet and Meta Platforms should be able to keep spending, but they could be pushed to issue more equity instead of debt. Alphabet, for one, already announced in June that it would issue more than $80 billion in equity this year to help fund its AI investments. That, in theory, should have been good for its bonds. In reality, the boost was limited because investors read the issuance as a sign the company might spend even more on AI, requiring just as much borrowing.
The following is the article titled "BSNL revenue up 10% in Q1: Scindia", reproduced from the sources:
BSNL revenue up 10% in Q1: Scindia
State-run Bharat Sanchar Nigam Ltd (BSNL) has provisionally posted around a 10% increase in revenue from operations in the first quarter of fiscal year 2027, telecom minister Jyotiraditya Scindia said on Monday.
While speaking to the media after the review meeting of BSNL for the first quarter of the current fiscal, Scindia said that BSNL’s enterprise business segment and consumer mobility have shown growth, while the consumer fixed access segment has remained almost flat.
“Last year, we closed first quarter (Q1) at ₹4,017 crore. This year, we have closed Q1 at ₹4,418 crore. So there’s a delta of ₹401 crore, an increase,” Scindia said.
The following is the article titled "DMart faces a quick comm test" by Ananya Roy, reproduced from the sources:
DMart faces a quick comm test
By Ananya Roy
Avenue Supermarts, which owns and operates supermarket chain DMart, is struggling against cut-throat competition from quick commerce in metros. Standalone revenue rose 15.1% year-on-year to ₹18,340 crore in the June quarter (Q1FY27), and Ebitda rose 16.3% to ₹1,527 crore.
The Ebitda margin expanded by only 10 basis points (bps) to 8.3% despite a 50-bps expansion in the gross margin. An improved mix with a higher share of margin-accretive general merchandise and apparel category buoyed the gross margin. Higher staff costs to support FY26’s back-ended store-addition contained operating margin expansion. That, along with higher depreciation and interest costs, led to a slower 12.8% growth in net profit to ₹936 crore.
Overall, growth is stalling as mature stores—those operating for two years or more—in metros become less productive. Of the 85 stores added in FY26, 58 came up in Q4. This slowed to just three stores in Q1, taking the total store count to 503. But the store footprint was 19% higher year-on-year and drove growth even as like-for-like (LFL) growth in mature stores slowed to 5.5% in Q1 from 10.8% in Q4. Bills cut—the number of daily invoices generated—rose 13.4% year-on-year to ₹11 crore due to new stores added in Q4. Store productivity, as measured by bills cut per store, fell about 5%.
Elara Securities believes quick commerce has weakened DMart’s historical pricing moat in metros. Blinkit, Zepto and Swiggy Instamart have been joined by Amazon and Flipkart in the quick commerce race. Sure, DMart also offers same-day delivery of online grocery orders. But the difference between consolidated and standalone results, which proxy DMart Ready’s performance, shows that growth has slowed to just 5.5% from a 20% growth profile earlier, Nuvama Research noted. It added that losses have widened to ₹75 crore in Q1 from ₹57/68 crore in Q1FY26/Q4.
The company has responded by cutting down its DMart Ready presence, while shifting focus towards quicker delivery. It exited seven cities during the quarter and is now present in only 11. Compared to 40% of orders currently taking over 12 hours for delivery, the management is gunning for six-hour deliveries by FY27. Breakeven is expected over the next few years.
Non-metro stores held up better. Elara estimates that metros account for about 60% of DMart’s revenue, implying encouraging 14-15% LFL growth in non-metros, while metro sales remained flat. This can be due to low quick commerce presence, along with price-sensitive customer behaviour in non-metro cities. But it leaves a significant expansion runway in non-metros for DMart, which can support growth even if quick-commerce competition continues to derail growth in metros.
Store expansion, a key growth lever, is expected to pick up pace. The board has approved raising about ₹1,000 crore through non-convertible debentures, which signals store additions in H2, says Nuvama. New stores are operating at about 55% of mature-store throughput, providing an important cushion to overall growth.
So far in CY26, the stock is up about 8% and continues to trade at 61 times estimated FY28 earnings, leaving little room for disappointment. Unless metro growth stabilizes or store productivity improves meaningfully, valuations may continue to cap near-term upside.
GROWTH WOES (SIDEBAR)
- DMART’S OVERALL growth is stalling as mature stores in metro cities become less productive.
- IT HAS CUT DOWN its DMart Ready presence, while focusing on quicker delivery.
The following is the article titled "Meta told to remove ‘pirated’ Zee content" by Yash Tiwari and Krishna Yadav, reproduced from the sources:
Meta told to remove ‘pirated’ Zee content
By Yash Tiwari & Krishna Yadav
The Delhi high court on Monday directed global technology giant Meta Platforms to remove Facebook posts that allegedly included pirated content belonging to Zee Entertainment Enterprises Ltd, granting the broadcaster immediate interim relief in its fresh copyright infringement suit against the social media company.
Justice Anup Jairam Bhambhani issued summons to Meta Platforms after hearing Zee Entertainment’s plea and directed the social media company to take down the identified Facebook URLs hosting the allegedly infringing copyrighted content.
Zee argued that several Facebook pages were illegally uploading its television programmes and clips, allowing users to watch them without permission. They also alleged that such pirated videos continued to resurface despite repeated takedown requests. Zee told the court that while Meta occasionally removed specific videos after receiving takedown notices, the remedy was ineffective as the infringing content continued to resurface on Facebook in different geographical locations.
The following is the article titled "South Africa’s anti-immigrant protests raise many questions" by Justice Malala, reproduced from the sources:
South Africa’s anti-immigrant protests raise many questions
The rise of xenophobia is a danger all of Africa needs to examine By Justice Malala
As betrayals go, South Africa turning its back on its continent is particularly brutal. Between 1960 and 1994, when South Africa’s liberation movements were banned and leaders like Nelson Mandela were imprisoned by its apartheid government, African countries established camps and schools for the diaspora and gave money and military aid to the resistance. Yet, last week, a months-long violent campaign of anti-African immigrant protests in the country by the newly minted organization March and March culminated in attacks on homes and property and the shutdown of major cities. Although these rallies did not descend into wholesale violence, shameful scenes of South Africans attacking alleged illegal foreigners and citizens they misidentified as immigrants were beamed across the globe. Organizers have vowed to protest every Thursday until local elections scheduled for 4 November.
These attacks are reprehensible, hateful, xenophobic, largely misinformed and have damaged South Africa’s reputation. The anti-migrant campaign imperils major investments on the African continent as pressure mounts from key destinations such as Nigeria for boycotts and diplomatic sanctions to be imposed. That said, tough questions need to be asked of Africa’s leaders about why millions of their citizens gamble with death to reach Europe or to wade through the crocodile-infested Limpopo River to escape Zimbabwe and reach South Africa. For too long, pointing out the faults of fellow Africans was seen as playing into the West’s post-colonial playbook. Those arguments are no longer sustainable as Africans themselves are asking these questions.
South Africa’s President Cyril Ramaphosa said in an address to his nation that solving migration pressures requires “peace where there is conflict, economic growth where there is stagnation and opportunity where there is poverty”. Rwanda’s foreign minister Olivier Nduhungirehe said on a visit to South Africa in mid-June that any discussion on migration should focus on root causes and that poverty, conflict and limited opportunities in countries of origin must be addressed, rather than shifting the blame to destination states such as South Africa. In plain language, Africans are fleeing undemocratic and kleptocratic leaders to find succour in places where they feel they can live freely and prosper.
Take mineral-rich Zimbabwe, the home nation of by far the vast majority of illegal immigrants in South Africa. Its former President Robert Mugabe was ousted from office after 37 years; his successor since 2017, Emmerson Mnangagwa, has just changed the constitution to extend his power beyond 2030. Instead of condemning him, Ramaphosa rewarded him with a high-profile visit two months ago. The millions of Zimbabwean migrants in South Africa were not mentioned. So even as South Africa drives out unregistered Zimbabweans—60,000 were deported just last week—many more will continue to come because their home country is politically and economically intolerable.
In Uganda, Muhoozi Kainerugaba, the army chief and son of President Yoweri Museveni (41 years in office), has just shut down the country’s main independent media group’s television station and newspaper. Two weeks ago, Kainerugaba kidnapped an opposition leader and posted pictures on X of the man begging for mercy while being tortured. It will not get better anytime soon unless something changes. According to US nonprofit Freedom House, nine countries have slid into dictatorship from democracy in Africa since 2019. Many of these are blessed with abundant mineral wealth—but only politically connected elites benefit.
It is convenient for the privileged to blame colonialism for Africa’s migration crisis. There is some truth to that, of course; but look at South Africa’s western neighbour, Botswana. It experienced 30 years of annual economic expansion surpassing 7% due to the astute management of its diamond wealth and its fidelity to democratic leadership. Botswana’s people do not flee; leadership matters.
What is to be done?. Ironically, African leaders have shown the way. Through the Lome Agreements of 2000, African Union (AU) leaders agreed to hold each other accountable and even boot out anti-democratic actors and kleptocrats among them. Major state wars in Africa declined to just four in 2010 from 12 in 2000. African leaders have now thrown their admirable handiwork aside. The AU has reverted to the bad ways of its predecessor, the Organisation of African Unity, which was notorious for tolerating dictators. If a few good leaders can rejuvenate the AU and reinforce the spine of the Lome agreement, then there is hope.
The following is the article titled "Has El Niño spared the monsoon? Not exactly" from the "Our View" section, reproduced from the sources:
Has El Niño spared the monsoon? Not exactly
Rainfall coverage is still of enormous importance to Indian well-being. While initial fears of an El Niño dry-up this year might have begun to evaporate, it’s too early to relax our guard
Nearly six weeks after the South-west monsoon that accounts for about 75% of India’s total rainfall arrived in Kerala, it is time to take stock of this age-old determinant of economic outcomes, especially in the country’s rural hinterland. The sectoral composition of India’s economy has transformed over the years, with agriculture now making up only about 18% of gross value added, but this reduction in share has not been matched by a corresponding decline in the numbers who depend on farming. As estimated, the farm sector supports almost 43% of India’s workforce today. No wonder the annual monsoon’s progress holds us in thrall year after year.
The good news is that our worst fears about 2026 being an El Niño year—when a pronounced tilt in warm equatorial waters from the Pacific Ocean’s western side to its eastern tends to give India a harsh summer and weak monsoon—have not been realized. Some of the initial deficit in rainfall has been made up over the past week or so. The bad news is that although rains have now covered the entire country, its progress has been far from uniform. According to the India Meteorological Department, rainfall is likely to be ‘subdued’ over large parts of the landmass over the next six-seven days. Region-wise, east and northeast India are the worst off, recording a deficit of 37% due to weak rains in Bihar, Jharkhand and five states of the Northeast. Also, total precipitation is not all that counts. The spatial and temporal spread of rainfall is highly relevant to agriculture. And here, the harsh reality is that only about half our arable land is irrigated, leaving vast tracts reliant on seasonal rains.
Worse, irrigation facilities are largely concentrated in the relatively rich north-western part of India and some coastal states, which means poorer states suffer more from scanty rains. The impact of this year’s erratic rainfall, critical for the kharif season crop, is already visible in sowing data. The latest update, dated 6 July, shows that sowing is 21% lower than last year, with the shortfall higher in the case of pulses and oilseeds, both of which already stand out for high import dependency. Cereal supplies are less of a problem. As reported, stocks of wheat and rice in the central pool are nearly four times the prescribed buffer norm. This offers a cushion against any scarcity-led price pressures. But as Indian diets move away from an overdose of cereals towards more pulses and other protein-rich foods, a poor domestic harvest of pulses may have a disproportionate effect on people’s cost of living. Add to that a revival of uncertainty over oil supplies via the Strait of Hormuz, and general price volatility is hard to escape. Retail inflation was almost 4.4% last month, with food inflation not just higher, but looking up.
In such a scenario, the government bears the onus to relieve a potential rise in distress. Employment can make a difference. The Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission Gramin, which promises rural jobs, went into effect on 1 July. But several fiscally stretched state governments are reportedly reluctant to let it soak up funds, since the scheme is not fully funded by the Centre and they can suspend it during harvest season. This tangle may need to be resolved swiftly. At midway point, the monsoon hasn’t suffered much of an El Niño dry-out, but it’s too early to relax our guard.
The following is the article titled "IT Act 2025 tidies up presumptive tax—with a catch" by Gautam Nayak, reproduced from the sources:
IT Act 2025 tidies up presumptive tax—with a catch
A drafting tweak may have unintended tax consequences for presumptive taxpayers By Gautam Nayak
The new Income Tax Act, 2025, which replaces the Income Tax Act, 1961, has become applicable from 1 April 2025. According to the government, there have been no policy changes—only simplification of the language and rationalization of the structure of the provisions. One area where this exercise is evident is presumptive taxation.
Three schemes combined The 1961 Act had three separate presumptive taxation schemes—one for small businesses (6% or 8% of turnover, with turnover limits of ₹2 crore/₹3 crore), one for low-income professionals (50% of gross receipts, with receipt limits of ₹50 lakh/₹75 lakh), and one for transport operators of commercial goods vehicles (presumptive income based on vehicle capacity, subject to a limit of 10 goods transport vehicles).
All three have now been consolidated into a single section under the 2025 Act and will apply from the tax year 2026-27, for which income tax returns will be filed next year. The new provision contains a table setting out the type of business or profession, conditions for eligibility, limits of total turnover or gross receipts, and the manner of computation of presumptive income. The eligibility conditions, turnover limits and method of computing presumptive income remain unchanged from the 1961 Act for all three categories.
Higher income clarified The earlier law left room for confusion over whether taxpayers whose actual income exceeded the presumptive income could still offer only the presumptive income to tax. While many assumed they could, the wording suggested that the higher of the actual or presumptive income had to be offered to tax.
Under the 2025 Act, this has been made explicit and unambiguous. The computation table specifies both the presumptive income and the profit claimed to have actually been earned, and clearly provides that the higher of the two will be treated as taxable income.
Deduction dilemma The other key change—whether intended or unintended—relates to the applicability of deductions. Under the 1961 Act, once presumptive income was taxed, all deductions under the head "Profits and Gains of Business or Profession" were deemed to have been allowed, and no further deduction under those provisions, such as depreciation, could be claimed.
The 2025 Act, however, states that any loss, allowance or deduction under the provisions of the Act shall not be allowed against the presumptive income. This is broader than the earlier restriction, as it applies to all losses, allowances and deductions, and not merely those relating to the computation of business income. Of course, if the taxpayer opts for the new tax regime, deductions for investments and losses from self-occupied house property are in any case not available. However, there are other items that may still affect taxpayers, even under the new regime.
To illustrate, a taxpayer may have a loss from another business (which does not fall under the presumptive taxation provisions), a loss from house property on account of interest paid on a housing loan for a let-out property (up to the permissible limit), or a loss under the head "Income from Other Sources" arising from interest paid on borrowings used to invest in debt instruments. Under the earlier law, such losses could generally be set off against presumptive business income under the head "Profits and Gains of Business or Profession". Under the 2025 Act, such setoffs may no longer be available. Of course, these losses can still be set off against other eligible income, wherever permitted under the Act.
A substantive change? This is a significant and substantive change, and not merely a drafting simplification. One does not know whether this is a drafting error or an intended policy change, particularly given the government's repeated assertion that the 2025 Act was not meant to introduce substantive policy changes.
If this is indeed an unintended drafting mistake, the law may need to be amended, which would likely happen only during the next Budget. Therefore, taxpayers should carefully review the new provisions while computing their income for the tax year 2026-27, remaining alert to changes in the law that may appear minor on the surface but could materially affect the computation of taxable income.
Gautam Nayak is a partner at CNK & Associates LLP.
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