Tax basics
India's tax system, simplified
Every rupee you earn or spend, the government takes a cut. It does so in two ways.
| Compare | Direct tax | Indirect tax |
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| When it applies | When you earn money | When you spend money |
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| Examples | Income tax, capital gains tax | GST, customs duty |
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| Who bears it | The person earning the income | The final consumer, through the price |
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The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026, and "tax year" replaces the older terms. Returns for FY 2025-26 still follow the 1961 Act.
New regime slabs, tax year 2026-27
| Income | Rate |
|---|
| Up to ₹4 lakh | Nil |
| ₹4 lakh to ₹8 lakh | 5% |
| ₹8 lakh to ₹12 lakh | 10% |
| ₹12 lakh to ₹16 lakh | 15% |
| ₹16 lakh to ₹20 lakh | 20% |
| ₹20 lakh to ₹24 lakh | 25% |
| Above ₹24 lakh | 30% |
Good to know: with the rebate, resident individuals pay no tax up to ₹12 lakh of income, or ₹12.75 lakh for salaried people after the standard deduction. A 4% cess applies on top of any tax payable.
GST
GST rates today
GST is hiding inside almost every price tag. Since 22 September 2025, the old 5%, 12%, 18% and 28% structure has been replaced by two main rates and one higher rate.
| Rate | Applies to |
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| 0% | Essentials such as milk, eggs and fresh vegetables |
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| 5% | Everyday goods, including most items from the former 12% rate |
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| 18% | The standard rate, including most items from the former 28% rate |
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| 40% | Luxury and sin goods |
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| 3% and 0.25% | Gold and silver at 3%, rough diamonds at 0.25% |
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Good to know: petrol and alcohol for human consumption are not under GST. States tax them separately, which is why their prices vary from state to state.
GST
When do you need GST registration?
It depends mainly on your annual turnover and what you supply. Know the thresholds before you register.
| Supplier | Most states, including Kerala | Special category states |
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| Goods | ₹40 lakh | ₹20 lakh |
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| Services | ₹20 lakh | ₹10 lakh |
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- Compulsory regardless of turnover in certain cases, such as inter-state supply of goods and selling through e-commerce platforms.
- Voluntary registration is open below the threshold, and lets you claim input tax credit and bill registered clients.
- Once registered, regular returns are due even in months with no sales.
Business structure
The basics of LLP
A Limited Liability Partnership combines the benefits of a partnership and a company. Partners have limited liability and enjoy operational flexibility.
- Limited liability: partners are not personally liable for the firm's debts.
- Separate legal entity: it can own assets, enter contracts and sue or be sued in its own name.
- Flexible structure: two or more partners, with no upper limit.
- Less compliance: requirements are fewer compared with a private limited company.
Who can form one? Individuals or existing companies, with at least two partners. At least two designated partners are needed, and one must be resident in India.
Common uses: professional services such as CA firms, law firms and consultants; startups and small businesses; joint ventures; and family businesses.
Annual filings: Form 11 (annual return) within 60 days of the financial year end, and Form 8 (statement of account and solvency) by 30 October.
Income tax
Buying a car above ₹10 lakh? TCS applies
If the sale value of a motor vehicle is above ₹10 lakh, the seller collects Tax Collected at Source (TCS) at 1%.
This is not an additional tax. The amount can be claimed as a credit while filing your Income Tax Return, and may result in a refund depending on your tax liability.
Key point: always check your TCS credit in Form 26AS and AIS before filing your ITR.
Reference
Compliance calendar
Your tax deadline is not a planning date. Here are the standard dates for the most common filings. The government sometimes extends them, so always confirm the current date before you rely on it.
| Date | Obligation | Applies to |
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| 7th, monthly | TDS and TCS deposit | Deductors and collectors |
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| 11th, monthly | GSTR-1 | Monthly GST filers |
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| 15th, monthly | PF and ESI contributions | Covered employers |
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| 20th, monthly | GSTR-3B | Monthly GST filers |
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| 15 Jun, Sep, Dec, Mar | Advance tax instalments | Taxpayers with liability above ₹10,000 |
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| 31 Jul, 31 Oct, 31 Jan, 31 May | Quarterly TDS returns | Deductors |
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| 31 July | ITR-1 and ITR-2 | Individuals, non-audit |
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| 31 August | ITR-3 and ITR-4 | Business and profession, non-audit |
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| 31 October | Income tax return | Audit cases |
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| 30 May | LLP Form 11 | LLPs |
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| 30 October | LLP Form 8 | LLPs |
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| 31 December | GSTR-9 | Eligible GST registrants |
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General information only, and not advice for your specific situation. Please consult us before acting on it.
