What are the Direct Taxes applicable to Companies?
Direct taxes in India is administered and collected by The Central Board of Direct Taxes (CBDT) under Ministry of Finance. Direct tax in India takes two forms viz.
Income Tax is governed under the Income Tax Act, 1961 and Wealth Tax is governed under the Wealth Tax Act, 1957. Additionally, under the Income Tax Act, every company which has paid or declared dividend to its shareholders is also required to pay corporate dividend tax at the applicable rate.
What is Income Tax and what types of Income Tax are applicable in India?
Income Tax is a tax on Income earned by an Individual or anybody corporate. Under the Indian Income Tax scheme, the income of any person is taxable under following four major heads viz.
- Income from Salary
- Income from House Property
- Income from Capital Gains
- Income from Profit and Gains from Business and Profession.
The total income of every person is calculated as per the prescribed norms and is taxed at the applicable rates. The rates at which income tax is payable are enacted by the Union Budget (Finance Act) for every Assessment Year.
Income Tax Returns for Corporate Assesses
Every person is required to file an income tax return for the income earned by it in the previous year. Unlike individuals, a corporate assessee is required to file income tax return every year irrespective of whether it has earned any income or not. In fact, even in case where a company has not started the business or has not carried on any business during the year or incurs losses in any financial year, an income tax return is required to be filed. For a corporate assessee, the due date for filing return is 30th September of the assessment year.
What is Wealth Tax?
Wealth tax is a direct tax which is charged on the net wealth of the assessee existing as on the valuation date. Net wealth means all assets less loans taken to acquire those assets and valuation date means 31st March of the year immediately preceding the assessment year.
In other words, it is a tax on the benefits derived from ownership of property. The tax is to be paid year after year on the same property on its market value, whether or not such property yields any income. In India, wealth tax is levied under the Wealth-tax Act, 1957. The Income tax department under the Department of Revenue, Ministry of Finance, administers the Wealth Tax Act, 1957 as well as the Wealth Tax Rules framed there under.
Is any separate return required to be filed for Wealth Tax?
Yes. A separate return is required to be fled for wealth tax. The due date for filing wealth tax return is 30th September of the Assessment Year, similar to that of Income Tax.
How we may help you?
We have a team of qualified and experienced tax professionals to assist our clients in relation to the following services:
- Filling of Tax returns
- Regulatory Compliances
- Assessment Procedures
- Tax Planning