Income Tax
Income Tax on profit and gain from business or profession
Under Income Tax Act 1961, tax is levied on five major head of income
- Income from salary
- Income from house property
- Profit and gain from business or profession
- Capital Gains
- Other income
Under the head profit and gain from business or profession, tax is levied as per the business entity ownership structure.
Proprietorship:
A proprietorship is a business entity which does not have a separate legal existence other than the owner (proprietor) of the company. Hence, the tax is levied as a personal income of the proprietor as per the slab rate applicable to an individual under Income Tax Act, 1961. The Slab rate for the AY 2014-15 & 2015-16 is given below:
|
Tax rate |
AY 2014-15 |
AY 2015-16 |
|
No Tax |
Income Upto 2,00,000/- |
Income Upto 2,50,000/- |
|
10% |
2,00,000/- to 5,00,000/- |
2,50,000/- to 5,00,000/- |
|
20% |
5,00,000/- to 10,00,000/- |
5,00,000/- to 10,00,000/- |
|
30% |
Above 10,00,000/- |
Above 10,00,000/- |
- Surcharge of 10% plus cess of 3% is charges on the income tax if the total taxable income exceeds 1 Crore
- For individual over and above the age of 60, no tax is charges on income upto Rs.3lakhs for AY 2015-16 and upto 2.5lakhs for AY 2014-15
- For individual over and above the age of 80, no tax is charges on income upto Rs.5lakhs for AY 2015-16 and upto 3 lakhs for AY 2014-15.
- Audit of accounts is mandatory for turnover over and above 1 Crore or net profit margin less than 8%
