At present there is two type of tax in India :-
- Direct Tax
- Indirect Tax
Direct Tax :- A direct tax is levied on the income of the individual and organization .the taxpayer pay directly to the government. Burden of direct tax cannot shift to others. Usually through “pay as you earn”
Ex :- income tax , wealth tax
Indirect Tax :- An indirect tax or goods and service tax is a tax collected by intermediary and the ultimate burden on consumer. Burden of tax can be shift to other.
Ex :- GST, custom duty
Income tax will be charged under 5 heads of income as per income tax
| Heads of income | Nature of income |
|---|---|
| Income from Salary | Salary income, pension received from employer |
| Income from House property | income received from rent |
| Income from capital gain | sales of any capital assets ,sales of house property, sales of jewellery |
| Income business and profession | income from self employment, freelancer and doctors , lawyers |
| Income from other sources | Bank interest, family pension, casual income |
Tax brackets (Slab rate)
- Tax rate depend on the age of the assesses (individual)
- Income earn up to rupees 5 lakhs
- Income earn in between rupees 5 lakhs to 10 lakhs
- Income earn over n above 10 lakh
Tax rate if an individual (taxpayer) under 60 years than rate of tax
| Income Range | Tax Rate | Tax payable |
|---|---|---|
| Up to Rupees 2.5 lakhs | 0% | no tax |
| In between Rupees 2.5 lakhs and 5 lakhs | 5% | 5% of total taxable income |
| In between Rupees 5 lakhs and 10 lakhs | 20% | Rs 12,500+ 20% of income above 5 lakh |
| Above 10 lakhs | 30% | Rs 1,12,500+30% of income above 10 lakh |
- In addition Health and Education cess 4% of the total income tax
- Surcharge: 10% of income tax, if the total income will exceeds Rs. 50 lakh up to Rs. 1 crore.
- Surcharge: 15% of income tax, if the total income exceeds Rs.1 crore.
Rate of tax for Super senior citizens (Age of the assess is 80 above & more)
| Income Range | Tax Rate | Tax payable |
|---|---|---|
| Up to Rupees 3 lakhs | 0% | no tax |
| In between Rupees 3 lakhs and 5 lakhs | 5% | 5% of total taxable income |
| In between Rupees 5 lakhs and 10 lakhs | 20% | Rs 10,000+ 20% of income above 5 lakh |
| Above 10 lakhs | 30% | Rs 1,10,000+30% of income above 10 lakh |
- In addition Health and Education cess 4% of the total income tax
- Surcharge: 10% of income tax, if the total income will exceeds Rs. 50 lakh up to Rs. 1 crore.
- Surcharge: 15% of income tax, if the total income exceeds Rs. 1 crore.
Tax slab rate other than individual and HUF
| Turnover Particulars | Tax Rate |
|---|---|
| Gross turnover upto 50 Cr. in the previous year | 25% |
| Gross turnover exceeding 50 Cr. in the previous year | 30% |
- In addition cess and surcharge is levied as follows: Cess: 4% of corporate tax Surcharge:
- Taxable income is more than 1Cr. but less than 10Cr. 7%
- Taxable income is more than 10Cr.12%