Income Tax Returns Vs GST Annual Returns

There has been a lot of confusion among the people of India between income tax returns as well as GST annual returns as soon as the Government of India imposed new tax rules and regulations. 

But there are huge differences between income tax return filing and GST annual return filing. It is very important to understand these differences and clear out the confusion. 

There are several laws implemented by the government of India for taxes so that the citizens of India can pay taxes of the right amount on the right interval. 

A major way to distinguish between income tax and GST annual return is based on direct tax as well as indirect tax. 

In other words, income tax is a direct tax; meanwhile, GST filings are indirect taxes. These two types of taxes are crucial for the government of India and its citizens. 

They play important roles and purposes in improving the infrastructure and regulation of the economy in India. 

Those citizens pay income tax in India that belongs to a certain salary slab. Whereas GST is paid by every citizen in India using a certain service and buying goods. 

Here is a guide on income tax returns and GST annual returns by ESPECIA to clear out all the confusion! 

Direct Tax and Indirect Tax

The Government of every country imposes taxes on its citizens every year. Every citizen of the country must pay taxes every year as per the rules and regulations. 

The collection of taxes in every country is done by the government and undertaken by various organizations. 

The rules and regulations of taxation are different in every country. The main goal behind taxing every citizen in a different country is to regulate the economy and improve its condition. 

Taxpayers are responsible for paying direct taxes. They are directly paid to the Government of India, which is non-transabled. 

These taxes are only paid by those citizens who receive income from a certain salary slab. 

On the other hand, indirect taxes are those taxes whose responsibilities can be granted to other people. They are transferable. 

It can also be said that indirect taxes can be used to cover taxes for other people. 

But finally, it's the consumer who is responsible for bearing the taxes. These taxes are paid by the consumer before the taxpayers even reach them. 

The tax collection of direct taxes is much harder than the tax collection of indirect taxes. 

The income tax is a category belonging to direct tax. In addition, the GST, which is responsible for goods, as well as services, and VAT (the Value Added Tax) come under indirect taxes.

Direct Tax examples

Here are examples of direct taxes. 

• Income tax is the main example of direct tax in India. The government of India imposes rules and regulations for income tax. It is paid by those citizens of India that fall under a certain salary as well as a Tax slab.
  
• The Government of India also impose taxes on Corporation as well as companies. These taxes are also a type of direct taxes.
  
• Estate duty is also a type of direct tax in India. These types of taxes are imposed on those citizens or individuals that have inherited a certain type of property.
  
• Fringe benefits tax also comes under the category of direct tax. The state government imposes these types of taxes. These taxes are imposed on employers that offer fringe benefits or services to their employers.
  
• Wealth tax is also a type of direct tax. This type of tax is imposed on those individuals that own a certain type of property.
  
• Gift tax is also considered a direct tax in India. These types of taxes are imposed on individuals that gift taxable items, and the tax has to be paid to the Government of India.

Indirect Tax examples

Here are examples of indirect taxes. 

• GST is one of the most popular and main types of indirect tax. This type of tax is applied to goods as well as services that are used and provided to the citizens of India.
  
• Sales tax is another type of indirect tax that is imposed on shopkeepers in India. But this type of tax is indirectly applied to the customers that use the services or goods by applying a tax on the items.
  
• Service Tax is also a type of indirect tax in India. These types of taxes are applied to the services such as restaurant services provided to people.
  
• Custom duty is also an indirect tax. These types of taxes are applied to those items or goods which are imported from different nations as a part of the trade.
  
• Entertainment tax is also a type of indirect tax. The owners of the cinema pay these types of taxes. These types of taxes are applied to the consumers of entertainment or media.
  
• Excise tax is also a type of indirect tax. This is a type of tax that is applied to the citizens of India that are manufacturers of a certain type of goods. But this type of tax is indirectly transferred to retailers as well as wholesalers.

What are GST annual returns?

GST is a type of indirect tax that the government of India introduces. The main purpose and aim of introducing GST in India were to eliminate the cycle of complicated tax systems that existed before the GST system. 

Those types of taxes made it difficult for tax collectors to collect them. The GST is applicable on goods as well as services. 

This type of tax applies to the supply chain of services and goods. Hence, GST returns are annual returns which regular taxpayers fill out. 

What are income tax annual returns?

Income tax is a type of direct tax that is paid by those individuals that come under a certain type of salary as well as tax bracket. 

In Other words, those citizens of India earning more than 2.5 lacks salary are worthy of paying income tax. 

The IT department of India is responsible for determining the Tax under a certain salary slab that individuals should pay. 

The highest amount of income tax is 30% of the salary, which can be paid by an individual from all over its income. 

It is mandatory and important for those citizens to pay income taxes. The responsibility of paying Income Tax to the Government of India cannot be shifted to any other individual. 

Hence, income tax returns are annual forms which Indian taxpayer citizens fill out. This form consists of the income of the individual with their salary. 

Income tax and GST: The Difference

• The income tax is imposed on those individuals that earn a certain amount of income or salary per year. The amount of income tax is to be paid by the individuals as a percentage of their salary directly to the Government of India. GST is those indirect taxes imposed on goods and services used by the citizens or customers in India.
  
• The income tax is only paid by those individuals whose income is 2.5 lakh per year or more than 2.5 lacks per year. But GST is paid by those individuals whose annual turnover is more than 40 lakh rupees. Therefore these individuals need to register for GST in order to pay it.
  
• Income tax is a type of direct tax that is collected directly by the government of India. But GST is an indirect type of tax that the government of India indirectly collects.
  
• The individuals are directly responsible for paying income tax. In other words, an individual salary is more than 2.5 lakh per year should directly pay Income Tax. This responsibility cannot be passed to any other person. But the GST is directly paid by the customers who are using a certain type of goods and services. It might be possible that the government is not directly collecting these taxes from the individuals, or the individuals are not directly paying it to the Government of India. The payment can be shifted into the hands of another person, but it directly comes under the customers.
  
• The scenario of train income tax is based on the salary of the individual, which can be gained by capital gain, annual salary, owning property, or others. The Government of India only imposed GST on certain goods and services.
  
• Income tax is a type of direct tax that only has one basis for its rule and regulation, which is the salary or income earned per individual. In Other words, the income earned by an individual per year is directly proportional to the income tax paid by the individual. The higher the income an individual earns per year, the higher the income tax would have to be paid by them. Meanwhile, GST has various coverage and a wide basis for citizens of India. GST has various dimensions of rules and regulations. In addition, it has also replaced various types of taxes, such as customs duty already.
  
• Income tax returns include tax as well as a salary to be paid by an individual per year in the form. Whereas GST annual returns include details such as purchases, sales, etc. 

Conclusion

Many people in India consider GST as well as income tax return the same. But they are not the same. 

Instead, they have use differences between them. Even though they both are the types of taxes paid by the citizens of India, they still have different grounds for rules and regulations.

Citizens who pay income tax returns in India that come under a certain tax and salary bracket for individuals with an annual income of more than 2.5 rupees are subjected to pay income tax returns. 

It is mandatory for these individuals to pay income tax returns as a part of their Indian citizen duty and responsibility. 

GST is a type of indirect tax which customers pay. These types of taxable that applicable to goods as well as services. 

For example, GST applies to gift items, imported items, services provided in restaurants or hotels, etc. 

Therefore, the responsibility of paying GST comes indirectly under the customers. But the responsibility of paying Income Tax cannot be given to other individuals. 

ESPECIA has cleared the air between GST and income tax returns. Let's fulfil our national duty by paying certain taxes accurately! 

Faq’s related to Income Tax Returns vs GST Annual Returns

1. Is the income tax return and GST return the same?

No income tax and GST returns are not the same. Income Tax comes under the category of direct taxes, whereas GST returns come under the category of indirect taxes. Income tax is paid by those people or individuals whose income comes from under a certain salary slab. Meanwhile, GST is paid by the citizens of India as customers who are users of certain goods as well as services.

2. What is the difference between GST & ITR?

The key difference between GST and income tax returns is that GST is a tax applicable on certain types of goods and services, whereas ITR applies to individuals with more than 2.5 lacks per year as their income. GST is indirectly paid or collected by the government of India. In addition, ITR is directly collected by the government of India. The responsibility of ITR cannot be given to any other person, but their responsibility of pain GST can be given to other individuals.

3. Can we claim GST in an income tax return?

Yes, GST can be claimed in an income tax return. In addition to the situation for claiming GST in income tax returns, the rules and regulations are stated in Section 54 of the GST Act.

4. What is the annual return in GST?

Form GSTR-9 explains the concept of annual return of GST. This is to be registered by those taxpayers who are regularly paying taxes. It is to be registered once every financial year. In this form, the taxpayers must give details of purchases, credit details, sales, and others. In addition, the details of demanding or receiving a claim are also mentioned here.

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