5 Direct Taxes to acquaint yourself with as an Indian Entrepreneur


 As long as you earn revenue or income, you have to pay taxes levied by the government. Taxes are categorized as two types – Direct Tax and Indirect Tax. Direct taxes are directly paid to the government by the taxpayer whereas Indirect taxes are imposed on products and services and are paid by the seller. Most CA firms in Bangalore would recommend you to become sure   about taxes as are applicable to your business so that you never get any tax evasion lawsuits. 

In today’s blog, we will talk about 5 Direct Taxes you must acquaint yourself with as an entrepreneur in India. So, let’s move forward without any more explanation.


Income Tax

This is one of the most misunderstood and popular direct taxes in India. One of the interesting things about this particular tax is that it has to be paid by both individuals and companies. Since our blog is focused on entrepreneurs, we will highlight Income Tax apropos to that. Let’s take a look at the tax slab for business owners who are below 60 years. 

Income

Tax Rate

Up to Rs 2.5L

Nil

Between Rs 2.5-5L

5%

Rs 5-10L

20%

Above   Rs 10L

30%

Dividend Distribution Tax

This type of tax has to be paid by the companies on the basis of dividends they pay to their investors. This tax is calculated as per the gross or net income an investor receives from their investment. At present, the DDT rate is 15%. 

Capital Gains Tax

Capital Gains Tax is only paid when there is a profit on the sale of a non-inventory asset - real estate, stocks, bonds, precious metals, and property. Currently, long-term capital gains are taxed at 20%. 

Securities Transaction Tax

Almost a good majority of businesses trade in the stock market. Securities too are a source of income hence government has come up with Securities Transaction Tax on the buying and selling of shares. 

Corporate Tax 

Some of you might know about “corporate tax”. For the benefit of ones who are not familiar with this particular tax, it is the type of income tax that is paid by the companies from the earned revenues. This tax is applicable only for those companies that have an annual turnover exceeding 1 crore. 


Sometimes, online searches do not help in understanding the gigantic and bemusing taxation system. That’s why you must get in touch with top CA firms in Bangalore for executing various tax functions, like tax filing, ITR filing, and so on. 

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