Table of Contents
- What is Tax?
- Types of Taxes
- Direct Tax
- Indirect Taxes
- Difference between Direct & Indirect Taxes
- Tax slabs & applicable rates for FY 23-24 AY 24-25
- New regime Income Tax Slab Rates FY 23-24 AY 24-25
- Income Tax slabs & Rates as Per Old Regime FY 2022-23
- ITR Filling
- By Whom it's required to file
- Due Dates For Filling Returns
As we know Indian taxation system which comprises various types of Taxes but let's understand it in broader view let's check out with the word "TAX"
What is Tax?
A tax is a mandatory fee or financial charge levied by any government on an individual or an organization to collect revenue for public works providing the best facilities and infrastructure. The collected fund is then used to fund different public expenditure programs. Every Government needs revenue to run the country & tax collection is one of the essential source for the purpose.
Types of Taxes
There are two types of Taxes exist in India which need to be paid by any individual or business as follows
- Direct Taxes
- Indirect Taxes
Direct Tax
Direct taxes are those taxes which is paid directly to the government & not transferred to any legal or judicial entities. In India the Direct Taxes collection is managed by CBDT (CENTRAL BOARD OF DIRECT TAXES)
Lets take some examples of Direct taxes in India
- Income Tax
- Wealth Tax
- Gift tax
- Capital gains tax
- Securities transaction taxes
Indirect Taxes
In general, taxes levied on Goods & services are known as indirect Taxes which are not directly paid to the government. These taxes are collected indirectly from the customer through addition in the price of goods or services which boost up the selling price.
The most common examples of indirect taxes are
- Goods & Services tax
- Taxes levied on imported goods
- Value Added Tax (VAT)
Difference between Direct & Indirect Taxes
After keeping above discussion in view major differences between Direct & indirect taxes are as below
| Points | Direct Tax | Indirect Tax |
| Levied on | Profits and income | Goods and services |
| Taxpayer | Individuals, HUFs and businesses | End-consumers of products, goods and services. |
| Tax Rate | Directly depends on income and profits | Same for everyone |
| Tax Burden | Progressive | Rate of tax is flat so tax burden is regressive |
| Transfer of liability | Not transferable | Can be transferable |
| Tax Collection | Complex | Quite convenient |
Tax slabs & applicable rates for FY 23-24 AY 24-25
Let's understand what are Tax slabs? In India taxes are applicable on the individual on the basis of income slabs as soon as the income increases the tax will also increase hence it is called Progressive Taxation system which is fair in view of equal distribution of income in Economy
The income tax slabs are different under the old and the new tax regimes. Further, the slab rates under the old tax regime are divided into three categories
- Indian Residents aged < 60 years + All the non-residents
- 60 to 80 years of age: Resident Senior citizens
- More than 80 years: Resident Super senior citizens
Currently, there are two different Income Tax regimes. Under both the income tax new regime and the old regime, taxpayers can avail of tax benefits.
New regime Income Tax Slab Rates FY 23-24 AY 24-25
| Income Slabs | Income Tax Rates |
| Up to Rs 3,00,000 | Nil |
| Rs 3,00,000 to Rs 6,00,000 | 5% on income which exceeds Rs 3,00,000 |
| Rs 6,00,000 to Rs 900,000 | Rs. 15,000 + 10% on income more than Rs 6,00,000 |
| Rs 9,00,000 to Rs 12,00,000 | Rs. 45,000 + 15% on income more than Rs 9,00,000 |
| Rs 12,00,000 to Rs 15,00,000 | Rs. 90,000 + 20% on income more than Rs 12,00,000 |
| Above Rs 15,00,000 | Rs. 150,000 + 30% on income more than Rs 15,00,000 |
Note: rebate u/s 87A will be allowed upto Rs. 7,00,000
Income Tax slabs & Rates as Per Old Regime FY 2022-23
-
For individual Below 60 years
| Income Slabs | Individuals Below The Age Of 60 Years and NRIs |
| Up to Rs 2.5 lakh | NIL |
| Rs 2.5 lakh - Rs 5 lakh | 5% |
| Rs 5 lakh - Rs 10 lakh | 20% |
| > Rs 10 lakh | 30% |
-
Income Tax Slab for Senior Citizens (60 to 80 years)
| Income Slabs | Tax Slabs for Senior Citizens(Aged 60 Years But Less Than 80 Years) |
| Rs 0 - Rs 3 lakh | NIL |
| Rs 3 lakh - Rs 5 lakh | 5% |
| Rs 5 lakh - Rs 10 lakh | 20% |
| > Rs 10 | 30% |
-
Income Tax Slabs for Individual above 80 years (Super Senior Citizen)
| Income Slabs | Income Tax Slab for Super Senior Citizens (Aged 80 Years And Above) |
| Rs 0 - Rs 5 lakh* | NIL |
| Rs 5 lakh - Rs 10 lakh | 20% |
| > Rs 10 lakh | 30% |
-
New Tax Regime Under Section 115BAC For FY: 22-23
| Income Slabs | Income Tax Rates |
| ₹0 - ₹2,50,000 | – |
| ₹2,50,000 - ₹5,00,000 | 5% |
| (tax rebate u/s 87A is available) | |
| ₹5,00,000 - ₹7,50,000 | 10% |
| ₹7,50,000 - ₹10,00,000 | 15% |
| ₹10,00,000 - ₹12,50,000 | 20% |
| ₹12,50,000 - ₹15,00,000 | 25% |
| >₹15,00,000 | 30% |
Note: Surcharge & Cess will be applicable as below rates
| Income | Rate |
| >50 Lakhs | 10% of Income tax |
| >1 Crores | 15% of Income tax |
| >2 Crores | 25% of Income tax |
| >5 Crores | 37% of Income tax ( In Budget 23 highest rate has been reduced to 25%) |
ITR FillingG
Income Tax Return (ITR) is a form that an individual submits to the Income Tax Department of India to file information about his income and taxes payable during that year. Information filed in an ITR should be applicable for a particular financial year between 1st April to 31st March of the next year which includes forms like ITR 1 TO 7 ( on the basis of income earned)
By Whom it's required to file
Section 139 of income tax act 1961 contains various provisions related to filing of various income tax returns by an Assesse,
-
Under section 139(1)
Filling of income tax return is mandatory for the following
- Income of an Assesses exceeds basic exemption limit need to file ITR with in the Due dates
- Firms, including ULP (Unlimited Liability Partnership) and LLP (Limited Liability Partnership)
- Any public, private, domestic, or foreign entity doing business in India or located in India
- Residents with assets outside of India or any entity retaining authority for an account based outside India
- Every BOI (Body of Individuals), AOP (Association of Persons), and HUF (Hindu Undivided Family) with income exceeding the prescribed exception limit
Due Dates For Filling Returns
- Individual / HUF/ AOP/ BOI (books of accounts not required to be audited)………. 31st July 2024
- Businesses (Requiring Audit)……….31st October 2024
- Businesses requiring transfer pricing reports(in case of international/specified domestic transactions)………..30th November 2024
- Revised Return…………31st December 2024
- Belated Return…………... 31st December 2024
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