Differentiate between income tax and GST
Before knowing about the Differences amid the income tax and GST, first we should understand a short introduction about the GST and income tax.
A short intro of GST:
The full name of GST is “goods and services tax”, which is a value-based tax like VAT and is levied on goods that are produced and sold for local consumption purposes. The GST is paid by the businesses involved at each the platform of the rations cycle but its ultimate cost is born in through user. For this every person who’s business is at a level must be register by taking a GST registration online. This has been implemented not only in India but also in some other countries with Input Tax Credit (ITC) mechanism to avoid double payment of tax at the same stage.
GST is a tax levied on most consumables and services, if we talk about India. The GST is placed in five tax slabs in the country of India for different categories of supply such as: as percent of 0-5-12-18-28 Some supply items such as petrol and fuel are not taxed.
And every registration holder needs to pay the GST return filing on time according to their pay months.
What is income tax?
Income tax is not an indirect tax, assessable by privately and ratepayers on the total income or benefit acquired by those in a pecuniary year. IT is also is also levied on the profit or revenue of businesses, but nope on completion built up through businessmen. In various countries, certain criteria are made for the competence of tax.
In some countries, the direct tax is deducted before the salary of their employees and it is conferred to the Income-Tax-Department. Direct tax is conferred by the residents of India as well as non-residents.
Income tax is assessable on the earned income like from the salary, revenue from any another origin, premises/wealth, metropolis gains,
In the Income tax there has no option to take registration under income tax but it is required that any person can be a part of their income tax return filing without any turnover or anything else.
Let’s know about the actual and most preferable point of the Article about differentiate between income tax and Goods and service tax. Read carefully about the all points which differentiate the Income tax and Goods and service tax.
What is the distinction amid the GST and Income Tax?
- GST’s full name is “Goods and services tax”, which is a value-based tax like VAT whereas income-tax (IT) which is also known as income tax is also a value-based tax.
- GST is not a direct tax while income tax is not an indirect tax it is part of direct tax.
- GST is levied on goods that are produced and sold for local consumption purposes whereas income tax is assessable on salary, income from any other source, capital gains, house/property, business, and other business/occupations.
- GST Registration is not so sold its new from the last five years. It was enforced in July 2017 in our country India, while income tax is not a new tax it is a very old tax.
- GST is taxable on consumption while income tax is assessable on profit and income.
- GST is a multi-step tax taxable at each the platform of the rations chain, while income tax is levied once a year on gross income loan able savings (as per 80C).
- GST consists of five tax slabs (0, 5, 12, 18, and 28) while on the other hand there are four slabs (0, 5, 20, and 30) in Income Tax.
- The annual limit for income tax payment is up to INR 2, 50,000, while it is mandatory to register for GST on businesses with a yearly gross sale/business of greater than INR twenty lakhs (20, 00,000).
- GST has a provision for Input Tax Credit (ITC) which allows taxpayers to claim a tax refund, whereas no such provision exists in Income Tax.