Personal Finance

Marriage is a personal milestone and a significant financial decision, especially in India, where it can offer tax benefits. For salaried individuals, tying the knot can lead to various legal avenues to save on taxes as a couple. While marriage expenses are exempt from taxes as they are considered personal expenditures, gifts received from immediate family or relatives for the marriage are also exempt from income tax under Section 56 of the Income Tax Act.

After marriage, though joint filing is not allowed in India, there are still ways for couples to maximize their tax savings. Each spouse can leverage different avenues to enhance their income tax savings, making it beneficial to plan finances together.

This approach becomes crucial as couples envision and plan for shared financial goals such as higher education, vacations, asset purchases, and other investments. By planning early and considering tax-saving investments, couples can achieve their financial objectives and optimize their tax liabilities, making their journey together financially secure.

Let’s explore the best ways to save income tax post-marriage in the country. We will also learn what gifts are tax-exempt during marriage.

Health Insurance

When embarking on the journey of marriage, safeguarding your family’s health becomes paramount. Under Section 80D of the Indian Income Tax Law, couples can claim deductions of up to Rs 25,000 for health insurance premiums for themselves and their families. This comprises a deduction of Rs 20,000 for insurance premiums and a sub-limit of Rs 5,000 for preventive medical check-ups. However, failing to undergo the annual health check-ups forfeits the sub-limit.

To optimize deductions, couples can pay premiums for each other’s health insurance policies, doubling the tax benefits to Rs 50,000 annually. For instance, if one spouse pays Rs 14,000 for their health insurance and the other pays Rs 11,000 for theirs, the total deduction amounts to Rs 25,000. Investing in a spouse’s health insurance can reduce taxable income, offering significant savings.

Home Loans

Post-marriage, many couples aspire to build a home together. Home loans offer substantial tax benefits under Section 80C, allowing individuals a deduction of Rs 1,50,000 for home loan repayments annually. By co-borrowing the loan on a 50:50 basis, couples can double this benefit to Rs 3,00,000 per year. Similarly, Section 24(B) provides tax benefits of up to Rs 2,00,000 annually on the interest paid for the home loan, effectively doubled for co-borrowing couples.

Life Insurance Policies:

Life insurance policies offer tax benefits under Section 80C. Both spouses can individually claim deductions, with varying premiums based on age. By strategizing premiums and coverages, couples can optimize tax savings while ensuring comprehensive financial protection for their families.

Tax Efficiency Through Investments:

Proper investment planning is crucial for reducing overall tax liabilities. Couples can strategically allocate investments to capitalize on tax-saving instruments. By diversifying investments and considering tax implications, couples can compound savings while securing their financial future.

Maximizing Salary Structure Benefits:

Optimizing different components of the salary structure can unlock additional tax benefits. House Rent Allowance (HRA), Leave Travel Allowance (LTA), and Medical reimbursement offer avenues for tax optimization. For instance, couples residing in rented accommodation can leverage HRA exemptions based on specific criteria, further reducing taxable income.

Planning for Retirement

Though retirement may seem distant, early planning ensures financial stability. Investing in retirement plans and annuity solutions offers tax-saving benefits under various sections of the Income Tax Act. Couples can capitalize on these provisions to build a substantial corpus while minimizing tax liabilities.

What are the Tax Rules for Wedding Gifts?

Some wedding gifts could be subject to tax, and the details should be known clearly. Here’s a breakdown of the gifts that can be taxed: 

Conclusion

Marriage brings love and opportunities for financial optimization, including income tax savings. By implementing these strategies, couples in India can effectively minimize their tax liabilities and channel their savings towards their shared goals and aspirations. Always remember to maintain your records of wedding gifts and discuss financial planning with your partner in advance.

*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

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FAQs

Have you failed to submit your investment declaration to your department on time? Or did you pay TDS on your interest, commission, and rental income even though your total income was not taxable? Or did you make a mistake in your advance tax calculation and pay too much?

Well, we have some good news for you. You can use the income tax refund tool to get back any excess tax deducted. Now, you must be super excited to know how. 

We have created this in-depth piece that covers everything you need to know about claiming an income tax refund. 

This article encompasses everything in detail, starting with eligibility, how to calculate your income tax refund, the claiming process, and 7 essential tips to get your income tax refund on time.

What is an income tax refund?

 An income tax refund arises whenever you pay more tax than your actual tax liability. This overpayment can be either through Tax Deducted at Source (TDS), TCS, Self-Assessment Tax, or advance tax; you are eligible for an income tax refund.

The earlier you file your return, the better your chances of receiving an income tax refund. The income tax department has significantly reduced refund processing time by leveraging technological advancements.

Faster tax return processing has resulted in faster income tax refunds. According to some media reports, the timeline for processing income tax returns in FY 2022-23 has jumped from 26 days in 2021-22 to 16-17 days in 2023-24, with the timeframe dropping further to 10 days beginning with AY 2023-24. 

Who is entitled to claim an Income Tax Refund? 

You may be eligible to claim an Income Tax Refund if you have paid more tax than your actual tax liability. Now, let’s discuss several instances to make the idea clear for you:

• Case 1: When advance tax paid on estimated income exceeds the actual tax liability.
• Case 2: If Tax Deducted at Source (TDS) from salary, interest, or other incomes is higher than the tax payable on regular assessment. (when you miss submitting your investment proofs on time, the employer deducts higher TDS).
• Case 3: When self-assessment tax paid is more than the actual tax liability.
• Case 4: In cases of double taxation, where tax is paid on the same income in India and a foreign country, India has an agreement with that country to avoid double taxation.

Pre-requisites For Claiming An Income Tax Refund

To claim an income tax refund, you must have-

1. Valid User ID and Password.
2. Pan Linked to your Aadhar Number
3. Filed ITR claiming an income tax refund.
4. The name entered in the Bank account must match the PAN Card details
5. Pre-validated Bank account.

Procedure to Claim a Refund

Claiming an income tax refund in India is a straightforward process integrated into filing your Income Tax Returns (ITR). 

Step 1: File Your ITR

Begin by accurately filing your ITR using the correct forms and properly reporting all income, deductions, and credits. Use Form 16, Form 26AS, and other relevant documents as references to avoid discrepancies.

Step 2: Verify Your Filing 

After submission, verify your ITR through Aadhaar OTP, EVC from your bank account, or by sending a signed ITR-V to the CPC. This step is crucial as unverified returns are not processed.

Step 3: Check Refund Eligibility 

You’re eligible for a refund if your paid taxes exceed your actual tax liability. The excess can be due to higher advance tax, excess TDS, or double taxation relief under DTAA.

Step 4: Track Your Refund

Post verification, the IT Department processes your return and issues a refund if applicable. You can monitor the progress of your tax refund through the e-filing portal.

Step 5: Refund Disbursement 

The refund is credited directly to your pre-validated bank account linked with your PAN. Ensure your bank details are current and correct.

Step 6: Address Delays 

If the refund takes longer than expected, raise a query on the e-filing portal or contact the CPC.

Refunds are typically issued 7 to 120 days after e-filing and verification and credited accordingly. (IT officials are constantly working on improving this deadline.) Remember, timely filing and accurate reporting are critical to a hassle-free refund process.

Steps to Check an Income Tax Refund Status

Step 1: Go to the e-filing portal.

Step 2: Feed in your User ID and Password

• Step 3: In the e-filing tab, go to View Filed Returns.

Step 3: Check your refund status for the desired Assessment year here.

How to Calculate Income Tax Refund Amount?

Income Tax Refund = Income Tax Liability for the financial year (tax calculated on your total income after considering all deductions and exemptions) – Total Taxes Paid ( Advance Tax, TDS, TCS, Self-Assessment Tax)

Let’s take an example to get a deeper understanding. Say, Mr Gupta has a taxable income of ₹7,50,000. After deductions under various tax-saving vehicles eligible under Section 80C, his net tax liability is ₹50,000. 

This example illustrates that a refund is due when the total tax liability (B) is less than the taxes paid. Conversely, additional tax would be payable if the taxes paid are less than the total tax liability (B).

7 Important Points To Get Your Refunds on Time

• File Early: Submit your ITR well before the deadline to avoid last-minute errors and delays.
• Accurate Information: Double-check all entries for accuracy, especially bank details and PAN, to ensure smooth processing.
• Pre-Validate Bank Account: Ensure your bank account is pre-validated on the e-filing portal to facilitate a direct refund.
• Rectify Mistakes Promptly: If you notice errors after filing, file a rectification request as soon as possible to avoid delays.
• Utilize Digital Signatures: If applicable, use a digital signature certificate to authenticate your ITR, which can expedite the processing.
• Keep an Eye on Notifications: The IT Department communicates through SMS and email. Regularly check for any communication regarding discrepancies or additional documentation required.
• E-Verification: You can opt for electronic verification of your ITR through Aadhaar OTP or EVC, which is faster than sending a physical ITR-V form.

The Bottom Line

Getting through the complexities of income tax refunds need not be a challenge. You can ensure a smooth refund experience by filing your returns accurately and on time, promptly verifying your information, and staying up to date on the status of your refund. 

Remember, the key to a quick refund is in the details, from pre-validating your bank account to understanding the nuances of interest on late refunds. Stay informed and prepared, and your careful preparation will ease the tax refund process.

FAQs

*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

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Understanding the nuances of income tax slabs is crucial for effective tax planning and compliance. The Assessment Year (AY) 2024-25 brings into focus the tax obligations and potential savings for individuals and entities alike. 

This article aims to demystify the income tax slabs for FY 2023-24 and AY 2024-25, guiding you through the complexities of tax planning.

What are Income Tax Slabs?

Income tax slabs are ranges of income that are taxed at specific rates set by the government within a financial year. These slabs determine how much tax you will pay on your income, with rates increasing as your income does. 

The tax slabs in India are part of a progressive tax system designed to ensure fairness; if you earn more, you pay a higher rate. 

Income tax income slabs vary for different groups, such as individuals, HUF, and companies, and are updated annually. For individuals, these categories often include special rates for senior and super-senior citizens. 

The government updates these income tax slabs annually during the budget presentation, adjusting the income ranges and tax rates to reflect economic conditions, inflation, and policy goals. 

Additionally, you can choose from old and new tax regimes, allowing you to choose the most beneficial for your financial situation. 

In essence, income tax income slabs categorize your income into ranges; each taxed at a specific rate. The lowest range typically starts tax-free, with rates escalating for higher income brackets. 

This system aims to distribute the tax burden equitably, ensuring those with higher earnings contribute more to government revenues.

Income Tax Slabs for FY 2023-24 and AY 2024-25: Old Tax Regime vs New Tax Regime 

The FY 2023-24 also continues the option between the old and new tax regimes for salaried tax slabs. While the old regime allows for numerous deductions and exemptions, the new income tax slabs offer simplified tax rates with fewer deductions. 

This choice empowers taxpayers to select the regime that best suits their financial situation, potentially leading to significant tax savings.

Note: The “5%*” in the old and new tax regimes indicates that there is a rebate available under section 87A for certain taxpayers i.e., for those whose taxable income is 5 lakhs or less. 

Example to Understand Tax Liability of Old Taxable Income Slabs vs. New Income Tax Slabs 

To understand the income tax slabs, let us look at the example of Mr. Anish Gupta, a salaried employee with a fixed income of ₹9,00,000. 

• As per the old regime, he is eligible for an overall tax deduction worth ₹1,00,000/- under Section 80C due to his ownership of a life insurance policy. 
• As per the new regime, he is only allowed to benefit from the standard deduction of ₹50,000/-.

As you can see, the old tax regime is more beneficial to those who like investing in tax-saving instruments like life insurance, medical insurance, PPFs, etc. On the other hand, the new regime is best for those who have fewer investments overall.

Hence, if you are some one with long-term stock investments, we highly recommend checking what deductions and benefits apply to you under each regime, so you can make the most out of your returns.

Should You Opt for the New Tax Regime? Some Things to Consider 

When considering the new tax regime introduced in India, it is crucial to weigh several factors to determine its suitability for your financial situation:

• Tax Rates vs. Deductions: The new regime offers lower tax rates but eliminates most deductions and exemptions. Analyze if the reduced rates outweigh the benefits of deductions you currently claim.
• Investment and Expenses: Your investment habits and significant expenses, like home loan interest and education loans, could influence your decision, as the old regime may offer more tax-saving opportunities through various deductions.
• Income Level: The effectiveness of each regime can vary based on your income. Lower-income individuals or those who do not utilize many tax-saving options might benefit from the new regime’s simplified structure.
• Flexibility and Simplicity: The new regime provides simplicity and the flexibility to switch between regimes annually for salaried individuals, appealing to those seeking a straightforward salaried tax slab and tax filing process.

If you are confused between the old vs. new taxable income slabs, consider consulting a tax advisor for personalized advice, taking into account your financial goals and tax-saving potential under each regime.

What is Surcharge in Income Tax 

The surcharge is an additional charge on the income tax payable by taxpayers whose income exceeds certain thresholds. For the Financial Year (FY) 2023-24, the income tax surcharge rates apply to individuals, HUFs, AOPs, BOIs, and artificial juridical persons under both the old and new tax regimes.

Here’s a concise table summarizing the surcharge rates for FY 2023-24:

What is Rebate in Income Tax? 

A rebate in income tax is a provision that allows eligible taxpayers to reduce the amount of tax they owe to the government. It is not a deduction from income but a direct reduction in tax liability, making it a beneficial feature for those with lower incomes. 

One of the most common rebates under the Indian Income Tax Act is under Section 87A, which is designed to provide relief to taxpayers with a total income below a certain threshold.

For the Financial Year (FY) 2023-24, the rebate under Section 87A is available for both the old and new tax regimes. Its eligibility criteria and limits remain the same under both regimes. 

Here’s a table summarizing the rebate limits for FY 2023-24:

It means that if your total taxable income after deductions is up to ₹5 lakhs, and you opt for the old regime, you are eligible for a rebate of up to ₹12,500. This can reduce your tax liability to zero if your calculated tax is less than or equal to ₹12,500. 

If your calculated tax is more than ₹12,500, you will only have to pay the difference. The rebate is applied to the total tax before adding the Health and Education Cess of 4%.

Deductions and Exemptions Applicable for FY 2023-24 

While learning about tax planning, it is crucial to know how to pay less tax. For FY 2023-24, you can access several deductions and exemptions to minimize your taxable income and tax liability. 

Key tax deductions for FY 2023-24 include:

• Section 80C: Up to ₹1.5 lakh on investments and certain expenses.
• Section 80D: For medical insurance premiums, offering up to ₹25,000 for individuals and ₹50,000 for senior citizens.
• Section 80E: On interest paid for education loans with no upper limit.
• Section 24: Deduction of up to ₹2 lakhs on home loan interest for self-occupied property.
• Section 80G: For donations, with deductions varying by the entity.

Notable tax exemptions for FY 2023-24 are:

• House Rent Allowance (HRA) and Leave Travel Allowance (LTA) for salaried individuals, which vary based on specific criteria.
• Standard Deduction of ₹50,000 for salaried employees and pensioners under the old tax regime.

Special Mention:

Section 80TTA offers a deduction of up to ₹10,000 on the interest income from savings accounts, which increases to ₹50,000 for senior citizens under Section 80TTB. 

Leveraging these can significantly reduce tax obligations, making it crucial for you to plan your investments and expenses strategically.

Conclusion 

The FY-24 and AY 2024-25 bring forth considerations that require careful navigation to optimize tax liabilities. With informed decision-making, you can significantly benefit from the structured income tax slabs and available deductions.

For more assistance, you can reach out to an investment advisory to help you manage your investment portfolio.  They can help with personalized tax and financial planning, such as choosing between tax savings vs. equity investment.

Income Tax Slabs FAQs

With the digitization of most processes, paying taxes no longer requires you to hire experts or queue in municipal offices. Be it paying taxes on property or on the profits from renting the said property, it can all be conveniently done online. 

There are also alternate payment options that you can use to pay property tax online. This further increases the convenience of the process as it lets you choose options that better suit your individual preferences.

However, paying taxes on property online can have a process that takes time to follow. Hence, here is a detailed overview of how to pay house tax online and the available options.

What is House Tax? 

Property tax, also known as house tax, is levied by local governments on property owners. The taxation rates are assessed based on the value of the real estate that taxpayers hold.   Beyond a legal obligation, it is also a vital resource for governments to fund public services.  

Paying house tax online ensures timely compliance, avoids penalties, and contributes to civic development. It’s not only faster but also environmentally friendly and hassle-free.

How to Pay House Tax Online? 

You can also learn how to pay home tax online using multiple tools:

• Through official city municipal websites (e.g., BBMP, MCGM, GHMC, etc.)
• Via authorized platforms like Paytm, PhonePe, or Bharat BillPay
• Using UPI-enabled apps linked to government channels

You can also learn how to pay home tax online using multiple tools:

• Through official city municipal websites (e.g., BBMP, MCGM, GHMC, etc.)
• Via authorized platforms like Paytm, PhonePe, or Bharat BillPay
• Using UPI-enabled apps linked to government channels

Step 1: Navigate to the official website of your local municipal corporation.

Step 2: Log in to the portal. This will require you to register if it is your first attempt to pay property tax online. You will need to submit your personal information for identity verification. 

Step 3:  Once logged in, a ‘Property Tax’ tab should be available for you to access under a Services Tab. Click on it.

Step 4: Option  for property types should be available on the screen E.g., You may see an option called “COC-603 Collection of Property Tax”; select one to continue.

Step 5: A tab with the option of assessment year should also be displayed. Select your desired financial year of assessment. 

Step 6: Further personal details such as your name, property identification number, and other property-related information will need to be submitted for calculation.

Step 7: Once the calculation is done, the total tax amount to be paid will be presented.  Preview it. 

Step 8: Once done, a list of payment options will be displayed. Select one that is most convenient. 

Step 9: Upon completion of payment, a download or print option for the challan will be displayed.

Step 10: Save and keep it handy for your future reference. 

Step-by-Step Guide to Filling Out the Property Tax Form

1. Go to your city’s municipal corporation site
2. Click on the ‘Property Tax’ or ‘Online Tax Payment’ option
3. Select the property category and assessment year
4. Fill in owner and property details as required
5. Preview the form and proceed to calculate tax

Required Documents and Information

• Property ID / Assessment number
• Owner name and contact details
• Previous tax receipts (if applicable)

Please Note: The exact steps may vary depending on your location and the municipal corporation that runs the portal. However, the basic steps involved in your house tax payment procedures will remain similar to the steps mentioned above. 

Benefits of Paying House Tax Online  

1. Convenience

You no longer need to visit municipal corporations or even hire chartered accountants to file and pay your property taxes. Moreover, the online process allows for flexibility in time and location, ensuring that you can pay property tax online no matter where you are or what time it is. 

2. Time-Saving

The online payment procedure eliminates the requirement of paperwork as well as long waiting times. This allows you to make quick transactions at your convenience.

3. Accuracy

Digital platforms provide you with accurate, quick, and reliable calculations. This greatly reduces the risks associated with errors in manual calculations. 

4. Security

Reputable online payment portals have advanced encryptions and security measures. This helps ensure the safety of your financial transactions that are made online. 

5. Record-Keeping

Online payment portals also generate detailed digital receipts and transaction records speedily. This can make it easier for you to track payment history as well as access relevant information whenever required. 

Common Issues When Paying House Tax Online

• Payment Failures and Refund Process: Retry later or contact customer support; refunds usually take 3–5 business days
• System Errors or Technical Issues: Clear cache or try a different browser/device

How to Resolve Payment Discrepancies: Contact the property tax helpdesk with transaction details and proof

Alternative Online Payment Methods for Property Taxes

Apart from the official portals of the local municipal corporations, you also have the option of using third-party platforms like Paytm. The platform has an easy, streamlined process similar to the one mentioned above and has a user-friendly interface as well. 

It is, however, recommended to use the official portals if you need to become more familiar with how to pay house tax online. 

Conclusion 

The online payment process for taxes on property has simplified the experience of paying taxes on property. This process not only offers convenience but also accuracy and security. 

Just like the online process simplifies the payment of taxes on property, a reliable financial advisory like Research & Ranking can simplify the process of achieving financial goals for property owners and property renters alike. 

The intricacies of deductions, like the HRA tax exemption rules, are often complicated to follow. The team at Research & Ranking not only provides you with personalized investment portfolios but also provides advice on tax deductions. This can include guidance on topics like how you can reduce income tax on rent. 

The equity research and technology provided by Research & Ranking allows for more competent portfolio management. It also provides advice on investments like high-growth stocks. This can benefit you if you are a new or even an experienced investor in the market. 

Property Tax Online Payment FAQs

Financial planning for businesses and individuals involves proper asset/expense allocation and being informed about tax liabilities. There are commonly two types of taxes applicable in India: indirect and direct tax. 

Being aware of the different direct tax types and how they work – especially direct taxation, is important. This can help you avoid paying any fines or penalties when filing your taxes due to any discrepancies. 

Through this blog, you will learn what direct tax is, different direct tax types, and other crucial information regarding direct tax.

What is Direct Tax? 

Direct tax in India is a type of taxation where the burden falls directly on the individual or organization being taxed. It is levied directly on the income or wealth of individuals and organizations. 

Governed by the Central Board of Direct Taxes (CBDT), these taxes are a primary source of revenue for the government. 

Notable direct tax types include Income Tax, levied on the annual income of persons; Corporate Tax, imposed on the earnings of companies; and Capital Gains Tax, applied to the profit from the sale of assets. 

Direct taxes are progressive in nature. The tax rate is decided based on the income earnings of businesses and individuals. It follows the simple rule that the higher the income, the higher the direct tax rate, and vice versa, thereby aiming to achieve equity in the taxation system. 

Direct tax liabilities cannot be transferred, and failure to make timely payments against direct taxes can result in fines and other consequences.  

Difference Between Direct Tax and Indirect Tax 

The primary difference between direct and indirect taxes is who bears the burden of the taxes. 

• Direct taxes are levied on the income or wealth of individuals or organizations and must be paid directly by them to the government. These taxes cannot be passed on to someone else. Examples include Income Tax, Corporate Tax, and Wealth Tax.
• Indirect taxes, on the other hand, are levied on the sale of goods and services and can be passed on from the seller to the buyer. The burden of these taxes shifts from the producer or seller to the consumer, who ultimately bears the tax. Examples include Goods and Services Tax (GST) and Value Added Tax (VAT).

Different Direct Tax Types 

• Income Tax – As the name suggests, income tax is imposed on the earned income of individuals and businesses. the tax rate is determined based on the total income from different sources minus the available deductions and exemptions. 
• Capital Gains Tax – The capital gains tax is applied to all the gains incurred by the sale of capital assets like stocks, mutual funds, real estate, etc. There are two types of capital gains tax – 
• Short-Term Capital Gains – The tax rate for this direct tax depends on the total income of the individual and the holding period, which should be less than 36 months. 

The applicable tax rate is 15% when STT (Securities Transaction Tax) is applicable. When it it does not apply, you will taxed as per normal slab rates.

Note: STT is a direct tax applied to every sale and purchase of a security listed on recognised stock exchnages in India. It is similar to TCS and the rates are decided by the governement. STT amounts must be paid over and above the transaction value.

• Long-Term Capital Gains – The tax rate for this direct tax is fixed at a flat 20% and is applicable for assets with a holding period longer than 36 months. 

It is applied at a rate of 10% for income over ₹1 lakh from sales of equity shares or equity-oriented mutual funds.

• Wealth Tax – Wealth tax was abolished in the 2015 budget (effective FY 2015-16), simplifying the tax structure. As an alternative, the finance minister hiked the surcharge from 2% to 12% for people with annual incomes over ₹1 Crore and for companies with annual incomes over ₹10 Crore.  
• Property/ Estate Tax – Another type of direct tax is property tax. The state authorities levy this tax category on individual property owners based on their area-based rating. Government lands or properties and vacant land are exempted under this tax. 
• Corporate Tax – The corporate tax is applied to all domestic companies based on their earned income from business operations. This direct tax is also applicable to any foreign business entity running its operations in India.  
• Securities Transaction Tax – There is a direct tax applicable on the sale and purchase of listed securities like bonds, equity, mutual funds, etc., called the securities transaction tax. This tax is applicable to the buyer or the seller based on the nature of the transaction.

Direct Taxation Rates 

Income Tax Rates: New Tax Regime for AY 2024 – 25 

Income Tax Rates: Old Tax Regime 

Capital Gains Tax Rates 

• Short-term capital gains follow the same tax slabs as the income tax slabs. 
• For long-term capital gains with indexation benefits, a 20% tax is implied. 
• For long-term capital gains without indexation benefits, a 10% tax is implied. 

Corporate Tax Rates 

Top Advantages of Direct Tax 

• Promotes Equity – Based on the direct tax examples, the main purpose of imposing these taxes is to ensure a fair distribution of wealth by applying higher tax rates on high incomes and lower tax rates on low incomes. This further improves the tax system in the country.
• Promotes Economic Well-being – Direct taxation is collected by the government. The contributions collected via different direct tax types increase the government revenue to provide better public services and infrastructure. 
• Encourages Investments – Along with the distinctive direct tax rates applicable to individuals and businesses, there are several deductions and exemptions on a range of investments. This encourages people to save and invest more. 
• Increases Accountability – With the strict deadlines for filing all direct tax returns, individuals and businesses are encouraged to comply with the law, improving accountability and promoting responsible citizenship.

Conclusion 

When it comes to direct tax, having a thorough understanding of all the forms, deductions, calculations, etc., is necessary before application. With the knowledge of what direct tax is and different direct tax examples and slabs, you can assess ways to reduce your tax liability.

Investments in tax-free bonds, stocks, and other such categories can help you manage your finances better and reduce your tax liability. However, assessing which stocks to buy can be challenging.  

To resolve this, you can seek consultation from an investment advisory to benefit from improved portfolio management and daily reporting. 

Direct Tax Most Common FAQs