In a significant relief measure for small business owners, the Government of India has announced that sole traders are now eligible to participate in the latest Income Tax Amnesty Scheme, aimed at resolving past tax defaults and encouraging voluntary compliance. The scheme, introduced by the Central Board of Direct Taxes (CBDT), allows individual proprietors to settle pending tax dues with reduced penalties and immunity from prosecution, provided they make full disclosure and payment within the prescribed window.

Under this amnesty program, sole proprietors with unreported income, non-filed returns, or unresolved assessment notices can now regularize their financial records without facing the full brunt of interest and penalties typically levied in such cases. The scheme covers assessment years up to 2022–23 and applies to cases involving minor discrepancies, cash-based business incomes, and mismatches between turnover and bank deposits. Eligible traders must submit a declaration form, compute dues as per scheme guidelines, and remit the amount either in one installment or under a permitted payment plan.

Government officials have stressed that the objective of the amnesty is not punitive but corrective, encouraging micro-entrepreneurs and informal business owners to become part of the formal economy. Special helpdesks and digital filing tools have been introduced to simplify the declaration process for sole proprietors, many of whom operate without formal accounting support. The move is expected to widen the tax base while offering a clean slate to thousands of self-employed professionals, shopkeepers, service providers, and artisans. Tax experts and trade bodies have welcomed the inclusion of sole traders, calling it a pragmatic and inclusive step toward economic transparency and long-term financial discipline.