Direct Tax, Meaning, Types, And Who Is Eligible?

In India, direct taxes are what individuals or businesses pay directly to the government. These taxes can't be passed on to someone else. Individuals, companies, and other legal entities like limited liability partnerships are the ones who pay these taxes directly to the government.

What Is Direct Tax?

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Types of Direct Tax

Income Tax:

• Corporate Tax: Applied to the profits of companies, with rates depending on whether the company is domestic or foreign, and its revenue.
• Capital Gain Tax: Levied on gains from selling capital assets like property or stocks, categorized as short-term or long-term gains.

Securities Transaction Tax:

Who Is Eligible to Pay Direct Tax?

• If you're a salaried individual making less than Rs 50 lakh yearly from salary, property, or other sources, you need to file taxes using ITR-1 form.
• Individuals and HUFs without income from business or profession gains must file using ITR-2.
• Those with income from business or profession gains must use ITR-3.
• Individuals, HUFs, and non-LLP firms earning less than Rs 50 lakh with income from professions and businesses as per Sections 44AD, 44ADA, and 44AE should file using ITR-4.
• Entities other than companies, individuals, and HUFs should file using ITR-5.
• Companies not claiming exemptions under Section 11 file using ITR-6.
• Individuals and firms required to furnish returns under Section 139(4A) or 139(4B) or 139(4D) should file using ITR-7.
• Persons and companies required to furnish returns under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) only, file accordingly.

Importance of Direct Tax