Knowing the distinction between income tax and GST is crucial in India\'s constantly changing tax environment. GST, or Goods and Services Tax, is an indirect tax imposed on the sale of goods and services, whereas income tax is a direct tax imposed on people and corporations based on their incomes. Let me tell you more about what is difference between GST and income tax.
What is the Difference Between GST and Income Tax?
GST and Income Tax are two distinct types of taxes levied in India, differing in their scope, applicability, and nature. Let me share with you more differences.
GST | Income Tax |
An indirect tax levied on the supply of goods and services. The burden of the tax is passed on to the end consumer. | A direct tax levied on an individual\'s or entity\'s income. The taxpayer directly pays it to the government. |
Applicable to businesses engaged in the supply of goods or services. It is charged at every stage of the supply chain and allows for input tax credit (ITC). Rates vary (0%, 5%, 12%, 18%, and 28%) depending on the goods or services. | Applicable to individuals, HUFs, companies, firms, and other entities earning income. Includes various income sources like salary, business profits, capital gains, etc. Tax slabs differ for individuals based on income levels (e.g., 5%, 10%, 20%, 30%). |
Meant to simplify and unify indirect taxes like VAT, service tax, and excise duty, ensuring uniform tax across India. | Targets revenue from individuals and entities to fund government expenditure. |
Filed monthly/quarterly through forms like GSTR-1, GSTR-3B, etc., based on turnover and business activity. | Filed annually through ITR forms, with advance tax payments for certain taxpayers. |
I hope you understand, what is the difference between income tax and GST.
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Goods and Services Tax (GST) and Income Tax are two distinct types of taxes in India, each serving a different purpose and governed by separate laws. Here are the key difference between Income Tax and GST.
What is the Difference Between Income Tax and GST?
GST is a consumption-based tax levied on the supply of goods and services. It is a value-added tax that is applied at each stage of the production and distribution chain. The ultimate burden is on the end consumer.
Income tax is a direct tax imposed on the income earned by individuals, Hindu Undivided Families (HUFs), companies, and other entities. It is based on the income earned during a specific financial year.
GST is applicable to the supply of goods and services across the country. It replaced multiple indirect taxes like VAT, service tax, central excise, etc. Income Tax applies to the income earned by individuals, businesses, and other entities. It covers various sources of income, including salaries, business profits, capital gains, and other income.
GST is administered by the Goods and Services Tax Network (GSTN) in collaboration with the central and state governments. Income Tax is administered by the Income Tax Department under the Ministry of Finance, Government of India.
GST is typically paid on a monthly or quarterly basis, depending on the turnover of the business. Individuals and businesses usually pay income tax annually, and advance tax payments may be required in installments during the financial year.
In GST the taxable event is the supply of goods or services. In Income Tax the taxable event is the earning of income, and the tax liability is based on the total income earned during the financial year.
GST has multiple tax rates (0%, 5%, 12%, 18%, and 28%) based on the nature of goods or services. In Income Tax, progressive tax rates apply to individuals, and different tax rates apply to different types of income for businesses.
I hope you have understood
what is difference between GST and income tax.
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What is Difference Between GST and Income Tax?
Priyanshu Gupta
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2024-01-23T12:25:01+00:00 2024-11-01T11:43:55+00:00Comment
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