Prudent Advice on India’s Taxes
Feb. 4 – As the Indian fiscal year nears to a close on the 31st of March, its time corporates and individuals calculate taxes due.
Taxes in India are calculated as direct taxes and indirect taxes. Taxes on individuals, corporates, non-residents, capital gains tax and dividend tax are all classified as direct taxes.
An individual who stays in India for more than 182 days or more in a fiscal year is liable to pay taxes ranging from 0-30 percent on his global and Indian income. A corporate is deemed to pay taxes on its income depending on whether it is classified as a foreign (40 percent) or an Indian company (30 percent). For non-resident Indian’s or those who have not lived in the country for more than 182 days taxes need to be paid on the income received or accrued in India. India has also entered into Double Tax Avoidance Agreements with 60 countries.
Indirect taxes include customs duties on imported goods which could range from 0-20 percent, excise duties which range from 0-16 percent on most commodities, sales tax levied on the sale of goods which ranges from 0-15 percent, service tax which amounts to 10 percent and value added tax. A 2-3 percent education cess is also applicable on the total tax payable.
As the national tax deadline nears at the end of March, write to Dezan Shira & Associates to help you better manage your taxes in India. The Economic Times also suggests various ways to help individuals lower the tax they pay.