Paying income tax does not grant relief from GST

The Income Tax Act, 1961 (Act) and the Goods and Services Tax Act (GST Act) are not mutually exclusive. Paying one does not grant relief from the other. Income Tax is required to be paid on the income earned by a person during a financial year. The proceeds that is received from the customers gets treated as income from profession and the total income, after claiming eligible deductions of expenses incurred, is chargeable to tax. However, no income-tax is required to be paid if the amount of the said total income is below the basic exemption limit of Rs 2,50,000 (Rs 5,00,000 in case of a senior citizens). GST is an indirect tax levied on supply of goods/ services which is required to be charged from the customers and deposited with the government. Similar to the income-tax, the basic exemption limit has also been specified for the payment of GST. Accordingly, liability to collect and pay GST arises when gross receipts exceeds Rs 20,00,000. Thus, if your total income and total receipts are below the respective threshold limits you shall neither be required to pay Income-tax or GST.

The employers compute the total income and taxes after giving deductions and allowances based on the documentary evidence submitted. Therefore, you shall have to submit documentary evidence for every deduction/ allowance that you wish to claim from your income. Deduction will be given only on the basis of the actuals submitted and not proposed declaration. You may also furnish the computation sheet prepared by your previous employer indicating the total TDS deducted by him.

Source- DNA.

The post Paying income tax does not grant relief from GST appeared first on GST Station.



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