Tax Direct & Indirect Taxes, GST Income Tax In India

Income Tax

In the present situation, most of the Indians are aware of what they need to pay the Tax. Plenty of the Indians are unaware of how to pay the Income Tax. Few people do not aware that they are paying the Indirect Tax on each product. Now taxes are divided into various forms like State Taxes, Direct Taxes, Indirect Taxes, Central Government Taxes, …etc. As per the Income Tax Act Taxes are broadly classified into two categories are Direct Taxes and Indirect Taxes. This difference is analyzed in taxes payable in India.

What is Tax?

The Word Tax Comes From the Latin Word “Taxo” which means Compulsory fee or Financial Charge levied by a government on Organizations, Firms, Societies, and Individuals. The main vision of the Tax is to raise the funds from the public and spend the money for national welfare and public awareness.

Types of Taxes In India After GST

When we speak about it broadly we know that the Indian Tax system has been divided into two categories they are Direct Tax and Indirect Tax. Who are paying the Income Tax, Road Tax, Corporate Tax, …etc will directly pay to the government. Indirect tax is paid on products and goods. Now it is converted into GST (Goods and Service Tax).

Direct Tax

  • The Simple form of definition the direct tax is Tax Payer directly pay to the government.
  • For Example Income Tax, Wealth Tax, Corporation Tax, …etc.
  • The Government will collect the Tax from the TaxPayers as per the economic and Earning capacity of the Individuals, Company and Any other Firms.

Indirect Tax

  • Indirect Tax cannot be collected directly it will be collected from the Consumers Indirectly. This Tax will be imposed Directly on the Consumers.
  • The government receives indirect tax payments from the Seller of the goods and services.
  • The Seller Will pay the Tax on behalf of the Customer and passes the tax.
  • For Example like Tax on Goods, Tax on Services, Sales Tax, Value Added Tax, ..etc.

Benefits of Paying Tax

Taxes will be treated as Fuel to the government. Central and State will use the government tax to the public welfare people. They are

  • Tax Payer’s tax will be useful for the loans and Credit Card Services.
  • Taxes will be used by the government for the welfare of the people and it will improve the standard of living.
  • The government has to manage many things in the country. These funds or amount will be used for the Infrastructure Development, Ensuring Safety of citizens and Administration and Civil Control Services, ..etc.

Recent Changes In Taxes In 2021

The Financial Minister Shri Nirmala Sitharaman has announced the new Budget. The BJP government has to make tremendous changes from 2014 to 2021. Now we have to discuss the Interim Budget 2021. No Income Tax payable up to 5 Lakhs and he can also get the Section 87A was increased up to Rs 12,500 from to Rs 2,500. However, they are not eligible for the tax they need to file the returns. The Amount under the Standard Deduction was raised to Rs 10000 to Rs 50000 From Rs 40000.

Tax Evasion Laws and Penalty

The Government of India has implemented various laws and rules to impose the tax on the Tax Payers. According to the Government rules the persons who are eligible for the tax Payment have to obey the rules and pay the tax.

  • As per Section 140(A)(1) if a Tax Payer fails to pay the Tax partially or wholly on the principle amount or Interest he will be declared as a Defaulter.
  • The AO (Assessing Officer) can Impose a penalty amount Equal to the Arrear as per Section 221(1) Clause.
  • In case an assessee conceals the Earnings or Income with a fine amount of 100% or 300% can be imposed on the Defaulter under Section 271(C).
  • If a Default does not respond to a tax notice he is liable under Section 142(1) or 143(2), The Assessing Officer AO has a right to file the returns as per the rules and regulations.

Income Tax

Income Tax will be treated as one of the Common Nature of Tax every person who is eligible to pay the tax as per the Crossing of Income Tax Slabs need to pay the Tax. The Total Income Tax Collected by the government was more than Rs 2.86 Lakhs crores which accounted for the 1/4th amount of the total Tax Collected by the government from all the available routes direct and indirect method of Tax.

Income Tax Slabs For AY 2021 – 22

S.No. Total Annual Income Applicable Rates For Income Tax
1 Up to 250000 Nil
2 2,50,001 To 5,00,000 5%
3 5,00,001 To 10,00,000 12,500 + 20% of total Income Exceeding 5,00,000
4 Above 10,00,000 1,12,5000 + Total Income Exceeding Rs 10,00,000

The above rates also include some Surcharge and Cess.

  • 10% of Surcharge is Applicable on Income Tax if the Income Exceeds Rs 50 Lakhs but Upto 1 Crore.
  • 15% Surcharge is applicable to Income Tax if the Income exceeding 1 Crore.
  • 4% Health and Education Cess is Applicable to the Income Tax and Applicable Surcharge.
  • As per the Government Tax Rates are the same for the Male and Female So There no gender bias.
  • Individuals having a total Income below Rs 5 Lakhs are eligible for a Full Tax Rebate Under Section 87A.

Income Tax Deductions

As per the Government norms those who are exceeding the income of Rs 2,50,000 above need to pay the Tax. The government also providing some exceptions and Exemptions depending upon the criteria. These Exemptions are defined under the various sections like 80C, 80D of the Income Tax Act 1961. Here we are going to provide some of the examples like Post Office Saving Schemes, Life Insurance, and Others.

Tax Deducted at Sources TDS

Income Tax Refund

The income tax department will deduct tax from the taxpayer before the due date of the tax quarter wise. But TDS will be deducted based on the income of the person. Tax Payer feels that we are paid the Tax amount excess they need to refund amount by filling the ITR (Income Tax Returns). Tax Payer mentions all the exemptions and allowances as per the rules and regulations they are paid with the Interest amount also. At the same time if they are late to pay the Tax they are also liable to pay the tax.

Income Tax Notice

If the Income Tax sent the Notices to the Tax Payers. They are not filed the ITR or they are filed in Default. Tax Payers who are failed to file the tax amount can check the Notice by login into the website of the Income-tax India e filing portal. TaxPayers are ignored to the notices they are liable to tax as per the rules and Regulations. They have to face the Income Tax Rules and Regulations they need to proceed with criminal proceedings. Any notice generated by the Income Tax Department cannot be manmade notice they have generated automatically by mismatching the statement.

Goods and Service Tax GST

GST will be treated as a tremendous change after the formation of the BJP government in the indirect tax regime. Goods and Service Tax Or GST is all Set to be Implemented from July 2021.

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