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Direct Taxes are broadly classified as :
Income tax: Income tax is a type of tax that an individual, a Hindu Undivided Family, or any other taxpayer, other than corporations, pays on their earnings. The rate at which such income should be taxed is set by legislation.
Corporate tax : Corporate tax is a tax that corporations pay on the profits they make from their operations. The income tax laws of India have established a specific rate of tax on corporations once again.
Short Points about Income Tax:
- Income tax is a sort of tax levied by governments on the earnings of enterprises and persons within their jurisdiction.
- Income tax is used to fund government services, pay debts, and give commodities to citizens.
- Personal income tax is a type of income tax applied on a person’s wages, salaries, and other sources of income.
- Corporations, partnerships, small enterprises, and self-employed people are all subject to business income taxes.
Types of Income Tax: Who should pay Income Tax
The Income Tax Act divides taxpayers into categories in order to apply different tax rates to distinct groups of people.
The following are the different types of taxpayers:
- Association of Persons (AOP)
- Body of Individuals (BOI)
- Hindu Undivided Family (HUF)
Individuals are also divided into two groups: residents and non-residents. Individuals who live in India must pay tax on their worldwide income, which includes money received both in India and abroad. Non-residents, on the other hand, are only required to pay taxes on income earned or accrued in India. For tax purposes, the residence status must be decided separately for each financial year based on the length of stay in India. For tax purposes, residents are further divided into the categories listed below.
- Individuals less than 60 years of age
- Individuals aged more than 60 but less than 80 years
- Individuals aged more than 80 years
Income Tax Slabs Under New Tax Regime
New regime slab rates
Existing regime slab rates
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