vat or income tax
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
23 June 2011
if a business of a person is registered under vat or sales tax scheme, he will have to pay income tax on income from that business or not?
23 June 2011
the both taxes (vat and income tax), are saprately charged by different statutes,
vat/cst is on sale of goods, while income tax is charged on the income of the asesee
in short income tax will be applicable even one is subject to other taxes
vat/cst is on sale of goods, while income tax is charged on the income of the asesee
in short income tax will be applicable even one is subject to other taxes
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24 June 2011
Let me clarify what is VAT. VAT is payable by yu as soon as you have sold the goods. Why it is payable because you have charges the same to the customer and has collected it on behalf of the State Government as an agent. Therefore, the same is payable.
Now, what is income tax. It is a charge against your profit. If you have not earned any profit out the transaction where VAT has been charged and paid no Income Tax is to be paid.
This means the income tax is payable on yearly basis subject to installments as fixed by the Government. Against against your total income certain amount has been allowed as basic exemption which means if you earn income above the basic exemption you need to pay Income Tax. If the income tax payable is below 5,000/- per year then you need not pay anything in advance. The entire amount is to be paid before the due date of filing of your return.
In this manner Income Tax and VAt both are payable.
Now, what is income tax. It is a charge against your profit. If you have not earned any profit out the transaction where VAT has been charged and paid no Income Tax is to be paid.
This means the income tax is payable on yearly basis subject to installments as fixed by the Government. Against against your total income certain amount has been allowed as basic exemption which means if you earn income above the basic exemption you need to pay Income Tax. If the income tax payable is below 5,000/- per year then you need not pay anything in advance. The entire amount is to be paid before the due date of filing of your return.
In this manner Income Tax and VAt both are payable.
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