Who all are liable to pay income tax in India?
○ Self-employed individuals ○ Salaried individuals ○ Hindu Undivided Family ○ Body of individuals ○ Association of Persons ○ Corporate firms or companies ○ Local authorities
Types of Direct Taxes
Income tax: It is levied on a Hindu Undivided Family or individuals on their net taxable income during a financial year which starts from April 1 and ends on the following March 31. Corporate tax: It is a tax that a company is liable to pay on the profits earned during a financial year.
Types of Indirect Taxes
Service tax, applicable on movie tickets or restaurant bills. Goods and services tax, which has replaced all indirect taxes, and business owners are responsible for collecting that tax. Value-added tax.
Other areas where tax collections are put into use by the Government of India are:
○ Pension schemes ○ Law enforcement ○ Government operations ○ Paying salaries to Government employees
Advantages of Income Tax in India
○ Visa applications ○ Quick credit approval ○ Income proof