Income Tax

Taxes in India can be divided as direct taxes and indirect taxes. Direct tax is tax you pay on your profit. Indirect tax is a tax that somebody else will collect tax on behalf of yours and pay down to government. Income tax is a direct tax.

Income tax for salaried employees:

• Income up to Rs.2,50,000 – Nil Tax
• Between Rs.2,50,000 to Rs.5,00,000 – 5%
• Between Rs.5,00,000 to Rs.7,50,000 – 10%
• Between Rs.7,50,000 to Rs.10,00,000 – 15%
• Between Rs.10,00,000 to Rs.12,50,000 – 20%
• Between Rs.12,50,000 to Rs.15,00,000 – 25%
• Above 15,00,000 – 30%

Income tax for self-employed:

Tax is levied under the head of Profit and gain from business or profession. Computation of profit takes place after deducting all the expenses and losses incurred for earning the income in the regular course of business, vocation or profession.

Income tax for Corporate:
All companies incorporated in India are required to file income tax returns. Under, income tax act 1961, company tax return is two types domestic and Foreign Company.
Domestic Company means an Indian company registered with the Ministry of Corporate Affairs like private limited company, One person company or Limited company.
Tax Rates:
Turnover upto Rs.250 Cr (Previous year) – 25%
Turnover exceeding Rs.300Cr (Previous Year) – 30%
Due Date:
Income Tax Retrun – 30th September
ITR Forms: ITR 6, ITR 7 forms

Taxation for AOP and BOI:
An association of persons or a body of individuals whether incorporated or not, is treated as a person under Income Tax Act,1961. Hence AOP and BOI is treated as a separate entity for the purpose of assessment under the income tax act.

Computation of Income?
The total income under the different heads like income from house property, profits or gains of business or profession, capital gains and income from other sources shall be worked out ignoring incomes which are exempt.