Looking for expert help with income tax for bakery owners and home bakers India? The team at Tax Garden, based in Kondapur, Hyderabad, helps Indian SMEs stay compliant. End-to-end filings, notices, and deadline tracking, all in one place.
Who is this guide for? If you own a bakery, run a home baking business, operate a cake shop, supply bread and biscuits wholesale, or sell baked goods through Swiggy, Zomato, or Instagram in India, this guide covers your complete income tax obligations for AY 2026-27 (FY 2025-26): income classification, Section 44AD presumptive taxation, business codes 04012 and 10008, GST at 0% to 5% on bakery products under GST 2.0, FSSAI licensing, TDS under Sections 194Q and 194-O, deductible business expenses, depreciation, and ITR filing.
India has over 3 lakh bakeries and an estimated 15 lakh home bakers selling through social media and delivery platforms. The bakery industry contributes over Rs 35,000 crore annually, yet most bakery owners file taxes without understanding the rules specific to their business: GST at 5% on cakes and pastries (reduced from 18% under GST 2.0), the nil rate on bread, the composition scheme choice between 1% manufacturer rate and 5% restaurant rate, FSSAI registration tiers, and the Section 44AD presumptive scheme that simplifies everything for small bakeries.
This guide covers every tax obligation a bakery owner or home baker faces. If you run a related food business, see also our guides for caterers and food truck operators, restaurant and cafe owners, and e-commerce sellers on Swiggy and Zomato.
How Bakery Owners and Home Bakers Earn Income
Bakery income comes from multiple channels, often within the same business:
Tax Rate Chart
Common Revenue Streams for Bakery Businesses
Typical ranges; actual revenue varies by city, scale, and product mix
Counter Sales (Walk-in Customers)
Bread, biscuits, cakes, pastries sold over the counter; cash-heavy for small bakeries
Bulk and Wholesale Orders
Hotels, restaurants, hostels, corporate canteens; recurring monthly contracts
Custom Cake and Event Orders
Birthday cakes, wedding cakes, festive orders; higher margins but seasonal
Online Delivery (Swiggy, Zomato)
Growing channel; 25% to 35% commission deducted by platform; TDS 194-O applies
Instagram and Social Media Orders
Primary channel for home bakers; UPI payments; no platform commission
Institutional Supply (Schools, Hospitals)
Tender-based for large bakeries; government buyers may deduct GST TDS; income-tax TDS only if 194Q or a work contract applies
Source: Industry estimates based on NRAI data, IMARC Group, and Tax Garden client filings (FY 2025-26)
A neighbourhood bakery in a metro city with steady footfall earns Rs 15 lakh to Rs 60 lakh per year. A mid-size bakery with wholesale supply earns Rs 60 lakh to Rs 2 crore. A home baker taking Instagram and WhatsApp orders for custom cakes earns Rs 3 lakh to Rs 20 lakh per year. A chain bakery or franchise operation can exceed Rs 5 crore annually.
Income Classification: Business Income
Bakery income is classified as Profits and Gains of Business or Profession under the business head (Section 28 of the Income Tax Act, 1961). Running a bakery or home baking business is a business activity. It is not a "specified profession" under Section 44AA (Section 62 under ITA 2025).
You use Section 44AD (Section 58, ITA 2025), not Section 44ADA.
The "pastry chef as professional" misconception
Some bakery owners who are trained pastry chefs attempt to classify their income as professional income under Section 44ADA to declare 50% deemed profit instead of 6% or 8%. This is incorrect. A pastry chef running a bakery is operating a business, not practising a profession listed under Section 44AA. Culinary arts do not appear in the specified professions list (legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, authorised representative, company secretary, information technology, and film artist). Misclassification triggers scrutiny and reassessment.
Business code for bakeries
Tax Rate Chart
Business Codes for Bakery Businesses
Select the code matching your primary activity in ITR-4 or ITR-3
04012 - Manufacture of bakery products
Covers bread, biscuit, cake, pastry, rusk manufacturing, including home bakers
10008 - Restaurants without bars
Bakery cafes and cake shops that serve food for consumption on the premises
09021 - Retail sale of food, beverages and tobacco in specialized stores
Shops that only resell bakery products made elsewhere
Source: Business codes for ITR forms (Schedule BP dropdown in the ITR-3 and ITR-4 utilities)
A bakery that manufactures and sells bread, cakes, and biscuits, including a home baker, should use 04012 in ITR-4 or ITR-3. A bakery with a cafe-style dine-in area can use 10008. Always confirm the code in the current year's utility dropdown.
The NIC codes for Udyam registration are different from ITR business codes: 10711 (manufacture of bread, rusk, and fresh bakery products), 10712 (manufacture of biscuits, cakes, pastries, rusks), and 10719 (other bakery products NEC).
Section 44AD Presumptive Taxation for Bakeries
Most bakery owners and home bakers with turnover up to Rs 2 crore (or Rs 3 crore if 95% or more of receipts and payments are non-cash) can use Section 44AD presumptive taxation. This eliminates the need for detailed books of accounts and audit.
Tax Rate Chart
Section 44AD Deemed Profit Rates for Bakeries
Minimum profit you must declare under presumptive taxation
Digital Receipts (UPI, Bank Transfer, Card)
UPI, NEFT, RTGS, credit and debit card, cheque, and demand draft receipts
Cash Receipts
Walk-in cash payments at bakery counter, cash on delivery for home bakers
Source: Section 44AD (Section 58, ITA 2025)
Example: Neighbourhood bakery with mixed receipts
A bakery earns Rs 40 lakh total turnover: Rs 28 lakh via UPI and card payments, and Rs 12 lakh in cash from counter sales.
- Digital portion: Rs 28,00,000 x 6% = Rs 1,68,000
- Cash portion: Rs 12,00,000 x 8% = Rs 96,000
- Total deemed profit: Rs 2,64,000
At this income level under the new tax regime, tax would be nil: Rs 2,64,000 is within the Rs 4 lakh nil slab, so even the Section 87A rebate is not needed.
Example: Home baker on Instagram
A home baker earns Rs 8 lakh from custom cake orders: Rs 7.5 lakh via UPI and Rs 50,000 in cash.
- Digital: Rs 7,50,000 x 6% = Rs 45,000
- Cash: Rs 50,000 x 8% = Rs 4,000
- Total deemed profit: Rs 49,000
Well below the basic exemption limit, so tax is nil. Filing is compulsory only if total income exceeds the basic exemption limit or another condition under Section 139(1) applies (for example business turnover above Rs 60 lakh, or TDS and TCS of Rs 25,000 or more in the year). Filing ITR-4 anyway is useful to claim back any TDS and to keep an income record.
When Section 44AD does not apply
Tax Rate Chart
Section 44AD Exclusions for Bakery Owners
If any condition applies, you must maintain full books and file ITR-3
Turnover exceeds Rs 2 crore (cash > 5%)
Section 44AD limit; maintain full books of accounts
Turnover exceeds Rs 3 crore (cash within 5%)
Extended limit for predominantly digital bakeries
LLP (Limited Liability Partnership)
LLPs cannot use Section 44AD; must maintain full books
Opted out of 44AD and income above BEL
If you opted for 44AD then switched to regular, you cannot use 44AD for the next five years if your total income exceeds the basic exemption limit
Source: Section 44AD(4) and (5), Income Tax Act 1961
GST on Bakery Products
GST is the most critical compliance area for bakeries because different products attract different rates, and the GST 2.0 reforms (22 September 2025) changed rates on several categories.
GST rate structure for bakery products
Tax Rate Chart
GST Rates on Bakery Products (Post GST 2.0, 22 September 2025)
Rates depend on product type and packaging
Bread (branded or otherwise) - HSN 1905
Plain white or brown bread and pav, loose or packaged; exempt unless served as part of a meal
Khakhra, Chapathi, Roti, Paratha - HSN 1905 or 2106
Moved to nil under GST 2.0
Cakes and Pastries - HSN 19059010
Reduced from 18% under GST 2.0; includes birthday cakes, muffins, cupcakes, pastries
Biscuits (plain) - HSN 1905
Reduced from 18% under GST 2.0; plain biscuits, cookies, and cream biscuits
Rusks and Toast - HSN 1905 40
Rusks, toasted bread and similar toasted products
Pizza Bread - HSN 1905
Reduced from 5% to nil under GST 2.0
Restaurant Service (dine-in or takeaway) - SAC 996331
If bakery serves food for consumption on premises or takeaway as a restaurant
Source: Notification 9/2025-CTR and GST Council 56th meeting (effective 22 September 2025); bread exemption under Notification 2/2017-CTR
The GST 2.0 impact on bakeries
Before 22 September 2025, cakes, pastries and biscuits attracted 18% GST and pizza bread 5%. After GST 2.0, cakes, pastries and biscuits moved to the 5% slab and pizza bread became nil. This is a significant change:
- Price reduction opportunity: Bakeries can pass the 13 percentage point reduction to customers, increasing competitiveness
- ITC impact: The 5% rate on bakery goods comes with Input Tax Credit, so a regular-scheme bakery can still claim ITC on taxable inputs and packaging. Where tax on inputs (for example 18% packaging or equipment services) exceeds 5% output tax, credit can build up; check whether an inverted duty refund applies. Only the 5% restaurant service rate is without ITC
- Composition scheme recalculation: Bakeries on the composition scheme at 1% (manufacturers) now face a smaller gap between composition and regular rates
GST registration threshold
GST registration for a bakery selling only goods is mandatory when annual turnover exceeds Rs 40 lakh in states that opted for the higher limit, or Rs 20 lakh in states such as Telangana that did not (Rs 10 lakh in Manipur, Mizoram, Nagaland and Tripura). A bakery cafe supplying restaurant service uses the Rs 20 lakh service limit. Selling through e-commerce no longer forces registration in every case: since 1 October 2023, small suppliers of goods can sell within their state through an e-commerce operator with an enrolment number instead of registration (Notification 34/2023-Central Tax), and suppliers of restaurant service through Swiggy or Zomato below the threshold are exempt from registration because the platform pays the tax under Section 9(5).
GST Composition Scheme for Bakeries
Bakeries with turnover up to Rs 1.5 crore can opt for the GST Composition Scheme, which simplifies GST compliance. The rate depends on how your bakery operates:
Tax Rate Chart
GST Composition Scheme Rates for Bakeries
Choose based on your primary business activity
Manufacturer (packaged goods only)
CGST 0.5% + SGST 0.5%; for bakeries producing and selling packaged bread, biscuits, cakes for wholesale or retail without dine-in
Restaurant or Eatery (dine-in or takeaway)
For bakery cafes and bakeries serving food for on-premises consumption
Trader (reselling bakery products)
For shops that buy and resell bakery products from other manufacturers
Source: Section 10, CGST Act 2017; GST Composition Scheme Rules
Manufacturer vs restaurant: which rate applies?
This is the most common GST confusion for bakeries. Selling your own bread, biscuits and cakes, whether wholesale or over a retail counter for customers to take away, is a supply of goods, so the 1% manufacturer rate applies. If your bakery serves food for consumption on the premises, like a cafe with seating, that part of the activity is a restaurant service and the 5% restaurant rate applies.
Check with your tax adviser if your bakery does both, because the classification decides your composition rate.
Composition scheme restrictions
- No Input Tax Credit on purchases
- Cannot issue tax invoices (only bill of supply)
- Cannot make inter-state sales
- Can sell goods through e-commerce operators only within the state, from 1 October 2023, under the special procedure in Notification 36/2023-Central Tax; restaurant service through Swiggy or Zomato is taxed in the hands of the platform under Section 9(5)
- Must file quarterly returns (CMP-08) instead of monthly GSTR-1 and GSTR-3B
TDS Provisions for Bakery Owners
Three TDS sections can come up for bakery businesses:
Section 194C: only for work contracts, not ordinary sales
A bulk order for your standard bread, cakes or biscuits is a contract for sale of goods, and Section 194C (Section 393, ITA 2025) does not cover it. The section excludes a contract for sale of goods unless the product is made to the buyer's specification using materials bought from that same buyer. It applies when a customer engages you for work, for example baking from the customer's own ingredients, or running a canteen service on contract. In those cases:
Tax Rate Chart
TDS Rates on Bakery Supply Contracts (Section 194C)
Applicable when single payment exceeds Rs 30,000 or aggregate exceeds Rs 1 lakh in a year
Payment to Individual or HUF Bakery Owner
Proprietorship bakeries; most small bakeries
Payment to Company, Firm, or Other Entity
Partnership firms, companies running bakery chains
No PAN Furnished
Higher rate under Section 206AA if bakery owner does not provide PAN
Source: Section 194C (Section 393, ITA 2025)
Example: A hotel orders bread and pastries worth Rs 60,000 per month from a bakery (proprietorship). This is a purchase of goods, so the hotel does not deduct TDS under Section 194C. If the hotel's own turnover exceeded Rs 10 crore in the previous year, it deducts 0.1% under Section 194Q only on purchases from you above Rs 50 lakh in the year. Any TDS deducted appears in your Form 26AS and AIS.
Section 194-O: TDS on Swiggy and Zomato sales
If your bakery or home baking business sells through Swiggy or Zomato, the platform deducts TDS at 0.1% on gross sales above Rs 5 lakh in a financial year under Section 194-O.
Tax Rate Chart
TDS on Bakery Sales Through E-Commerce Platforms
Platform deducts TDS before settlement
Gross sales above Rs 5 lakh on Swiggy or Zomato
Deducted on gross order value, not net settlement; appears in AIS
No PAN furnished to platform
Higher rate if PAN is not linked to platform account
Source: Section 194-O (Section 393, ITA 2025)
Home bakers on both Swiggy and Zomato must declare gross sales from both platforms in their ITR. The combined TDS data appears in a single AIS entry per PAN. Under-reporting is immediately visible.
30% disallowance for non-deduction
If your bakery is required to deduct TDS and fails to do so on payments to residents such as contractors or landlords, Section 40(a)(ia) (Section 35, ITA 2025) disallows 30% of that expense. An individual or HUF owner generally has to deduct under Sections 194C and 194-I only if the business was liable to tax audit in the previous year. Example: such a bakery pays shop rent of Rs 70,000 a month, above the Rs 50,000 per month threshold of Section 194-I, and deducts no TDS. Of the Rs 8,40,000 annual rent, 30%, that is Rs 2,52,000, is disallowed until the TDS is paid.
FSSAI Registration for Bakeries
FSSAI registration is mandatory for all food businesses in India under the Food Safety and Standards Act, 2006. Operating a bakery without FSSAI registration attracts fines up to Rs 5 lakh and potential imprisonment.
Tax Rate Chart
FSSAI License Tiers for Bakeries
Select the tier based on your annual turnover
Basic Registration (Form A)
Turnover up to Rs 12 lakh; covers home bakers, small neighbourhood bakeries; register on FoSCoS portal
State License (Form B)
Turnover Rs 12 lakh to Rs 20 crore; requires physical premises inspection; processing 30 to 60 days
Central License
Turnover above Rs 20 crore or operating in multiple states; large bakery chains and franchise operations
Source: FSSAI (Food Safety and Standards Authority of India)
FSSAI for home bakers
Home bakers need at minimum the basic FSSAI registration (Form A). The process takes under 30 minutes on the FoSCoS portal (foscos.fssai.gov.in). Documents required: Aadhaar card, passport-size photograph, proof of address, and a self-declaration of food safety practices. You can register for up to 5 years at Rs 500 (avoiding annual renewals).
FSSAI as a tax-deductible expense
FSSAI registration fees, annual renewal fees, and any costs incurred for food safety compliance (testing, training, labelling) are fully deductible business expenses. Deduct them in your profit and loss account if filing ITR-3. Under Section 44AD presumptive taxation, these expenses are already deemed included in the 6% or 8% profit rate.
Home Baker Tax Obligations
Home bakers face the same tax laws as commercial bakeries. There is no separate "cottage food" exemption in Indian tax law.
Key rules for home bakers
Step-by-Step Guide
Tax Compliance Checklist for Home Bakers
Register with FSSAI
Basic registration (Form A) at Rs 100 per year on the FoSCoS portal. Mandatory before selling any food product.
Track All Income
Maintain records of all orders: Instagram DMs, WhatsApp orders, Swiggy and Zomato settlements, UPI receipts. All income is taxable regardless of the platform used.
Get GST Registration When Required
Mandatory once annual turnover exceeds Rs 20 lakh (Rs 10 lakh in special category states) or when selling through e-commerce platforms.
File ITR-4 Using Section 44AD
Declare 6% of UPI and bank transfer receipts and 8% of cash receipts as deemed profit. No need for detailed books of accounts.
Pay Advance Tax If Applicable
If your tax liability exceeds Rs 10,000 in a year, pay advance tax. Under Section 44AD, a single instalment by 15 March is sufficient.
Declare Swiggy and Zomato TDS
If selling through platforms, the 0.1% TDS deducted under Section 194-O must be claimed as credit in your ITR.
Instagram and social media income
Income from Instagram orders, WhatsApp orders, and direct delivery is taxable even if you do not have a shop or GST registration. The Income Tax Act taxes all business income regardless of how it is received. UPI payments are tracked through your bank account and appear in the Annual Information Statement (AIS). Not reporting this income while having large UPI inflows creates a mismatch that the tax department's automated systems flag.
Platform commissions and deductions
If you sell through Swiggy or Zomato, your gross order value and net settlement are different amounts. For ITR purposes under Section 44AD, declare the gross order value as your turnover (before platform commissions, delivery charges, and TDS). The platform commission is a business expense already deemed covered by the 6% or 8% presumptive rate.
Deductible Business Expenses
If you maintain full books of accounts and file ITR-3 (not using Section 44AD), the following expenses are deductible:
Tax Rate Chart
Common Deductible Expenses for Bakeries
Only applicable when filing ITR-3 with actual profit computation; not available under 44AD
Raw Materials
Flour (maida, atta, sooji), sugar, butter, eggs, cream, chocolate, dry fruits, yeast, baking powder
Rent (Shop, Kitchen, or Cold Storage)
Shop rent, cold storage rent, commissary rent; TDS under 194-I on rent above Rs 50,000 per month (if you are liable to deduct)
Employee Salaries and Wages
Bakers, counter staff, delivery persons, cleaning staff; TDS under 192 on salary
Electricity and Gas
Major expense for bakeries; commercial electricity rates apply for shop premises
Packaging Materials
Boxes, bags, wrapping paper, cake boards, tin foils, labels
Delivery and Transport
Fuel for delivery vehicle, courier charges, Dunzo or Porter delivery fees
FSSAI Fees and Food Testing
Registration fees, renewal, lab testing, hygiene training
Equipment Maintenance and Repairs
Oven servicing, mixer repair, refrigerator maintenance
Platform Commissions (Swiggy, Zomato)
25% to 35% of order value; deduct as selling expense
Marketing and Advertising
Instagram ads, Google ads, Zomato promoted listings, signage, flyers
Source: Sections 30 to 37, Income Tax Act 1961
Depreciation on Bakery Equipment
Bakery businesses invest significantly in equipment. Depreciation is allowed on assets used for the business under the Written Down Value (WDV) method:
Tax Rate Chart
Depreciation Rates for Bakery Assets
Written Down Value (WDV) method; applicable only when filing ITR-3
Ovens (Commercial, Deck, Convection)
Plant and machinery; includes gas and electric ovens
Mixers, Dough Kneaders, Sheeters
Plant and machinery; planetary mixers, spiral mixers
Refrigerators and Display Coolers
Walk-in coolers, display refrigerators, deep freezers
Delivery Vehicles
Cars, vans and two-wheelers at 15%; the 30% rate applies only to vehicles used in a business of running them on hire
Furniture and Fixtures
Display counters, shelving, tables, chairs for cafe area
Computers and POS Systems
Billing software, POS terminals, laptops used for business
Source: Appendix I to the Income-tax Rules, 1962
Home bakers using personal kitchen equipment for business can claim depreciation on the business-use portion. If an oven costing Rs 50,000 is used 70% for business, depreciation applies on Rs 35,000 at 15% WDV.
ITR Form Selection for Bakery Owners
Comparison
ITR Form Comparison for Bakery Businesses
| Feature | ITR-4 (Sugam) | ITR-3 |
|---|---|---|
| Who should file | Bakery owners using Section 44AD with total income up to Rs 50 lakh | Bakery owners with full books, income above Rs 50 lakh, or not eligible for 44AD |
| Profit computation | Deemed profit: 6% digital, 8% cash | Actual profit from books of accounts |
| Books of accounts | Not required | Mandatory (purchase register, sales register, cash book, ledger) |
| Tax audit | Not required (unless declaring below 6% or 8%) | Required if turnover exceeds Rs 1 crore (Rs 10 crore if cash within 5%) |
| Expense deduction | Not available (deemed included in 6% or 8%) | Full deduction of all business expenses |
| Depreciation claim | Not available separately | Available on all business assets |
| Business code entry | Schedule BP: Nature of Business | Schedule BP: Nature of Business + Manufacturing Account |
| GST details | GSTIN, turnover figures | Full GST reconciliation with GSTR-3B and GSTR-9 |
For a detailed comparison of when to choose which form, see our ITR-2 vs ITR-3 vs ITR-4 guide.
When ITR-3 is better than ITR-4
If your bakery has high expenses (rent above Rs 3 lakh per year, staff salary, equipment purchases) and your actual profit margin is below 6% to 8%, filing ITR-3 with actual books may result in lower tax. However, you must maintain complete books and may need a tax audit if turnover exceeds Rs 1 crore. Once you opt out of 44AD, you cannot re-enter for the next five years if your total income exceeds the basic exemption limit.
Advance Tax for Bakery Owners
If your total tax liability for the year exceeds Rs 10,000 (after TDS credit), you must pay advance tax. Failure to pay triggers interest under Section 234B and 234C.
Tax Rate Chart
Advance Tax Schedule for Bakery Owners
Due dates and percentages for FY 2025-26
Section 44AD Users (Presumptive)
Single instalment; no quarterly payments needed under presumptive taxation
ITR-3 Filers: 15 June 2025
First instalment
ITR-3 Filers: 15 September 2025
Second instalment
ITR-3 Filers: 15 December 2025
Third instalment
ITR-3 Filers: 15 March 2026
Final instalment
Source: Section 211 (Section 408, ITA 2025); Section 44AD
Income Tax Act 2025 Section Mapping
From FY 2026-27, the Income Tax Act 2025 replaces the 1961 Act. Key sections for bakery owners with their new numbers:
Comparison
ITA 2025 Section Mapping for Bakery Owners
| Provision | Old Section (ITA 1961) | New Section (ITA 2025) |
|---|---|---|
| Business income | Section 28 | Section 26 |
| Presumptive taxation (business) | Section 44AD | Section 58 |
| Tax audit threshold | Section 44AB | Section 63 |
| TDS on contractors | Section 194C | Section 393 |
| TDS on e-commerce | Section 194-O | Section 393 |
| Advance tax instalments | Section 211 | Section 408 |
| Interest for deferment of advance tax | Section 234C | Section 425 |
| Disallowance for non-TDS | Section 40(a)(ia) | Section 35 |
| Books of accounts | Section 44AA | Section 62 |
| Depreciation | Section 32 | Section 33 |
For a complete mapping of all sections, see our ITA 2025 section mapping guide.
Common Mistakes Bakery Owners Make
Step-by-Step Guide
8 Tax Mistakes Bakery Owners Should Avoid
Not registering with FSSAI
Operating without FSSAI registration is illegal and non-deductible expenses related to penalties are not allowable. Register before starting operations.
Ignoring GST composition scheme choice
Paying 5% as a restaurant when your counter sales are really goods taxed at 1% under composition costs your bakery 5x in GST. Evaluate your business model before choosing.
Not tracking Swiggy and Zomato gross sales
Declaring only the net settlement amount instead of gross order value understates your turnover. The platform reports gross sales to the tax department.
Mixing personal and business bank accounts
Home bakers frequently receive UPI payments in personal accounts. All business receipts should flow through a separate account for clean ITR filing.
Claiming Section 44ADA instead of 44AD
Baking is not a specified profession. Using 44ADA (50% deemed profit for professionals) instead of 44AD (6% or 8%) for a bakery triggers reassessment.
Missing TDS credit from bulk orders
Large buyers deducting TDS under 194Q (or 194C on work contracts) generate credit in Form 26AS. Not claiming this credit means paying tax twice.
Not paying advance tax under 44AD
Even under presumptive taxation, if your tax exceeds Rs 10,000, you must pay 100% advance tax by 15 March. Missing this attracts Section 234C interest.
Using wrong GST rate on cakes and pastries
Post GST 2.0, cakes and pastries are 5% (not 18%). Charging 18% to customers and remitting only 5% to the government creates a liability. Charging 18% and remitting 18% overpays GST. Update your billing software.
Pre-Filing Checklist for AY 2026-27
Deadline Timeline
ITR Filing Checklist for Bakery Owners
Bank statements for all business accounts (including UPI settlement accounts)
Swiggy and Zomato monthly settlement reports and TDS certificates
Bulk order invoices and any TDS certificates (194Q or 194C) from hotels and institutions
Cross-check Form 26AS and AIS for all TDS credits (194-O, 194Q, 194C)
Total turnover: counter sales + wholesale + online + Instagram orders
Split turnover into digital receipts (6% rate) and cash receipts (8% rate)
GST returns filed and reconciled (GSTR-1, GSTR-3B, or CMP-08)
FSSAI registration is current and renewal not overdue
ITR-4 (Section 44AD) or ITR-3 (full books, no audit) by 31 August 2026; 21 November 2026 if your accounts are audited
Any remaining self-assessment tax before filing
Frequently Asked Questions
Which ITR form should a bakery owner file for AY 2026-27?
Most bakery owners file ITR-4 (Sugam) when using Section 44AD presumptive taxation and total income is below Rs 50 lakh. If you maintain full books of accounts, claim actual expenses, or your income exceeds Rs 50 lakh, file ITR-3. Company-owned bakeries file ITR-6. Partnership firms and LLPs file ITR-5.
What is the GST rate on bakery products in India?
From 22 September 2025 under GST 2.0, most bakery products under HSN 1905 attract 5% GST. This includes cakes, pastries, biscuits and rusks. Bread (branded or otherwise) is exempt, and pizza bread, khakhra, chapathi and roti moved to nil. Bakeries serving food as a restaurant service pay 5% GST without ITC under SAC 996331.
Can home bakers use Section 44AD presumptive taxation?
Yes. Home baking is a business activity eligible for Section 44AD (Section 58, ITA 2025). Declare 6% of digital receipts and 8% of cash receipts as deemed profit. The turnover limit is Rs 2 crore (Rs 3 crore if 95% or more receipts are non-cash). Home bakers below these limits can use ITR-4.
Do bakery owners need FSSAI registration?
Yes. FSSAI registration is mandatory for all food businesses under the Food Safety and Standards Act, 2006. Bakeries with annual turnover up to Rs 12 lakh need basic FSSAI registration (Rs 100 per year). Above Rs 12 lakh, a State License is required (Rs 2,000 to Rs 5,000 per year). Selling food without FSSAI registration attracts fines up to Rs 5 lakh.
Is TDS deducted on bakery bulk orders or Swiggy and Zomato sales?
Bulk orders for your standard cakes, bread or biscuits are a sale of goods, so Section 194C usually does not apply. A large buyer with turnover above Rs 10 crore deducts 0.1% under Section 194Q only after its purchases from you cross Rs 50 lakh in the year. Swiggy and Zomato deduct 0.1% under Section 194-O, except for an individual seller with a PAN whose platform sales stay within Rs 5 lakh.
When does a bakery or home baker need GST registration?
A bakery that only sells goods registers once turnover crosses Rs 40 lakh in most states, but Rs 20 lakh in Telangana and Rs 10 lakh in Manipur, Mizoram, Nagaland and Tripura. A bakery cafe serving food on its premises is supplying a restaurant service, so the Rs 20 lakh service limit applies. Small manufacturers can opt for composition at 1% of turnover up to Rs 1.5 crore.
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Can I get GST filing and registration services in Kondapur?
Yes. Tax Garden offers end-to-end GST services from our Kondapur office: GST registration, GSTR-1, GSTR-3B, GSTR-9 annual returns, ITC reconciliation, e-invoicing setup, and GST notice handling for businesses of all sizes in Kondapur and Hyderabad.
Do you file ITR for salaried employees and businesses in Hyderabad?
Yes. Our Kondapur team files ITR for salaried employees, freelancers, consultants, business owners, LLPs, and companies across Hyderabad. We cover ITR-1 through ITR-6 with complete Chapter VI-A deduction reconciliation, AIS reconciliation, and proactive deadline management.
Which areas in Hyderabad does Tax Garden serve?
Tax Garden's Kondapur office serves clients across Hyderabad including HITEC City, Gachibowli, Madhapur, Jubilee Hills, Banjara Hills, Begumpet, Secunderabad, Ameerpet, Kukatpally, Uppal, LB Nagar, and all of Telangana. Most services are available fully online.
What compliance services does Tax Garden offer for startups in Kondapur?
Tax Garden is a compliance partner for startups in Kondapur and Hyderabad's HITEC City corridor. We handle company incorporation, GST registration, TDS filings, payroll, ROC annual filings, director KYC, and annual ITR filing, all under one flat-fee plan.
How does Tax Garden's compliance model compare to traditional hourly accounting services in Hyderabad?
Unlike traditional accounting practices that charge hourly and are difficult to reach, Tax Garden operates on flat-fee subscription plans with a dedicated account manager, monthly compliance updates, and WhatsApp-first communication. Our AI-powered workflow catches errors before filings are submitted, and Kavach error-protection ensures you are never left alone if something goes wrong.
