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New Income Tax Act 2025 — Key Updates

The Income Tax Bill 2025 (effective 1 April 2026) replaces the 1961 Act with simplified language and restructured sections. Here are the critical changes every taxpayer and business must know:

①
Sec 2: Simplified Definitions & Tax Year Concept

"Previous Year" replaced by "Tax Year" (1 April – 31 March). 536 sections condensed to 536 clauses with clearer language. Assessment Year concept eliminated.

②
Sec 143–145: New Tax Slabs Under Default Regime

₹0–4L Nil | ₹4–8L @5% | ₹8–12L @10% | ₹12–16L @15% | ₹16–20L @20% | ₹20–24L @25% | Above ₹24L @30%. Standard deduction ₹75,000. No tax up to ₹12L (rebate u/s 87A).

③
Sec 11–13: Revised TDS/TCS Rates & Thresholds

TDS on rent raised to ₹6L threshold. TCS on foreign remittance: ₹10L limit before 20% applies. Section-wise consolidated rates for all deductors.

④
Sec 36–41: Capital Gains Rationalisation

LTCG at 12.5%. STCG on listed at 20%. 12-month holding for listed securities, 24 months for unlisted. Indexation removed; grandfathering applies.

⑤
Sec 528–533: Penalties & Compliance

Table-based penalty structure. Faceless assessment codified. VDA taxed at 30%. File Form 10-IEA before due date to switch regime.

Constitution-wise Tax Rates Applicable in India

Comprehensive tax rate tables as per the Indian Constitution — covering Income Tax Act 2025, GST Act, Professional Tax (PTRC & PTEC), VAT, and Customs Act with relevant Article & Section references.

Income Tax Act 2025 — New Default Regime (FY 2025-26)

Constitutional Basis: Article 265 (No tax except by authority of law) | Article 246 read with Entry 82, Union List (Seventh Schedule) | Parliament has exclusive power to levy taxes on income.

Income Slab (₹) Tax Rate Section Reference
0 – 4,00,000 Nil Sec 143(1)
4,00,001 – 8,00,000 5% Sec 143(2)
8,00,001 – 12,00,000 10% Sec 143(3)
12,00,001 – 16,00,000 15% Sec 143(4)
16,00,001 – 20,00,000 20% Sec 143(5)
20,00,001 – 24,00,000 25% Sec 143(6)
Above 24,00,000 30% Sec 143(7)
Additional Notes:
  • Health & Education Cess: 4% on total tax
  • Surcharge: 10% (₹50L–₹1Cr), 15% (₹1Cr–₹2Cr), 25% (₹2Cr–₹5Cr)
  • Rebate u/s 87A: No tax up to ₹12,00,000 taxable income
  • Standard Deduction: ₹75,000 for salaried/pensioners
  • Company Tax: 22% (Sec 115BAA) / 15% (Sec 115BAB new mfg.)

GST Act — Goods & Services Tax Rates

Constitutional Basis: Article 246A (Special provision for GST) introduced by 101st Amendment Act, 2016 | Article 269A (Levy & collection of IGST) | Article 279A (GST Council).

Category GST Rate Examples
Essential Goods 0% (Exempt) Fresh milk, vegetables, grains, salt, books
Common Use Goods 5% Sugar, tea, edible oil, medicines, coal
Standard Goods 12% Butter, ghee, mobiles, sewing machines
Most Services & Goods 18% IT services, financial, telecom, restaurants (AC)
Luxury & Demerit 28% Cars, tobacco, aerated drinks, cement
Composition — Manufacturers/Traders 1% Turnover up to ₹1.5 Crore
Composition — Restaurants 5% Turnover up to ₹1.5 Crore
Composition — Service Providers 6% Turnover up to ₹50 Lakh
Key Points:
  • Compensation Cess on luxury items (cars, tobacco) above 28%
  • Threshold: ₹20L for goods (₹10L for special category states)
  • E-invoicing mandatory for turnover above ₹5 Crore
  • RCM applicable on specified goods & services

Professional Tax — PTRC & PTEC (Maharashtra)

Constitutional Basis: Article 276 — Power of States to levy profession tax | Maximum limit: ₹2,500 per annum | Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975.

PTRC — Professional Tax on Salary/Wages (Maharashtra)
Monthly Salary (₹) Tax Per Month (₹) Remarks
Up to ₹7,500 Nil Exempt
₹7,501 – ₹10,000 ₹175 Per month
Above ₹10,000 ₹200 (₹300 in Feb) Max ₹2,500/year
PTEC — Professional Tax Enrolment Certificate
Category Annual Tax (₹) Due Date
Professionals (CA, Lawyer, Doctor, etc.) ₹2,500 30th June
Businesses / Self-employed ₹2,500 30th June
Companies & Firms ₹2,500 30th June
Important:
  • PTRC: Employer deducts from salary and deposits to State Govt
  • PTEC: Self-enrolled professionals/businesses pay directly
  • Penalty for late payment: Interest + penalty as per State rules
  • Maximum Professional Tax per Constitution: ₹2,500/year (Article 276)

VAT — Value Added Tax (Items Outside GST)

Constitutional Basis: Entry 54 of State List (Seventh Schedule) — Taxes on sale of petroleum crude, high speed diesel, motor spirit (petrol), natural gas, aviation turbine fuel & alcoholic liquor. These remain outside GST per Article 246A proviso.

Item Category VAT Rate Applicability
Petrol (Unbranded) 25% + ₹10.12/L State VAT — Maharashtra
Diesel (Unbranded) 21% + ₹3/L State VAT — Maharashtra
Aviation Turbine Fuel 25% State VAT
Natural Gas 13.5% State VAT (varies by state)
Crude Oil Varies State-specific rates
Liquor (IMFL) Varies (State excise + VAT) State Excise & VAT combined
Note:
  • VAT continues on petroleum products, alcohol & electricity (outside GST)
  • Entry 54 of State List — States retain power to levy VAT on these items
  • Rates vary significantly between states
  • Input Tax Credit not available across GST & VAT systems

Customs Act, 1962 — Import & Export Duties

Constitutional Basis: Article 265 | Entry 83 of Union List — Duties of customs including export duties. Customs Act, 1962 governs levy, collection & procedures. Rates notified via Finance Act and Customs Tariff Act, 1975.

Duty Type Rate Section / Basis
Basic Customs Duty (BCD) 0% – 150% Sec 12 — First & Second Schedule
Social Welfare Surcharge (SWS) 10% on BCD Finance Act, 2018
IGST on Imports 5% / 12% / 18% / 28% Sec 3(7) — as applicable
Agriculture Infrastructure Cess Varies (up to 35%) Finance Act 2021
Anti-Dumping Duty As notified Sec 9A — case-specific
Safeguard Duty As notified Sec 8B — temporary protection
Key Provisions:
  • Assessable Value = CIF value (Cost + Insurance + Freight)
  • Gold: BCD 15% | Silver: BCD 15% | Electronics: 0%–20%
  • FTA benefits under various trade agreements reduce BCD
  • Customs Act, 1962 empowers Central Govt under Article 265 & Entry 83, Union List

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Complete Business Compliance — Latest Updates & Process Flows

From India's starting-to-business compliance to maintaining accounting, audit, tax planning & growth management — eTaxBook is your one-stop compliance partner with 100% support.

Wages Act & Code on Wages 2019

Consolidated 4 labour laws into one code. Updated definition of 'wages' (50% threshold rule). Applicability to all establishments. Floor wage notifications, overtime rules & compliance calendar for every employer.

EPF Act & Rules (Latest)

Applicability: 20+ employees. Contribution: 12% each (employer & employee) on Basic+DA. Wage ceiling ₹15,000. Higher pension option, auto-transfer via UAN, online ECR filing.

ESI Act & Rules (Latest)

Applicability: 10+ employees, wage limit ₹21,000/month. Employer 3.25%, Employee 0.75%. Coverage extended to all districts. Medical, sickness, maternity & disablement benefits.

TDS — Section-wise Latest Updates

194A (Interest) 10% above ₹40K | 194C (Contractors) 1%/2% | 194H (Commission) 5% | 194I (Rent) 2%/10% above ₹6L | 194J (Professional) 10% | 194Q (Purchase) 0.1% above ₹50L.

GST Act with Updated Rules

Business-wise applicability: ₹20L threshold (₹10L special category). Composition scheme ₹1.5Cr. GSTR-1/3B/9 timelines. ITC matching, e-invoicing above ₹5Cr, RCM provisions.

FOSCOS / FSSAI Latest Updates

Registration: Turnover <₹12L (Basic). State License: ₹12L–20Cr. Central: >₹20Cr. Latest portal updates, FoSCoS online process, hygiene rating & renewal criteria.

Payroll Maintenance — One-Stop Solution

End-to-end payroll processing with software guidelines. CTC structuring, salary breakup, PF/ESI/PT/MLWF deductions, Form 16 generation & full-and-final settlement.

Company Act 2013 — Full Process Flow

Registration (SPICe+/AGILE-PRO) → DIN/DSC → MOA/AOA → Incorporation → Annual Compliance → Board Meetings → AGM → RoC Filing.

Trademark — Complete Process Flow

Brand name selection → TM search → Application (TM-A) → Vienna coding → Examination → Objection → Advertisement → Registration.

MLWF Act — Maharashtra

Maharashtra Labour Welfare Fund: Employee ₹25 + Employer ₹75 per half-year (June & December). Online payment via MLWF portal.

MSME / Udyam Registration

Updated categories: Micro (Investment <₹1Cr, Turnover <₹5Cr) | Small (<₹10Cr, <₹50Cr) | Medium (<₹50Cr, <₹250Cr). Benefits: Priority lending, lower interest.

Shop Act, Udyam & Drug License

Shop & Establishment Act: Registration within 30 days. Drug License: Categories (retail/wholesale/manufacturing). 100% end-to-end support.

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India's Starting-to-Business Compliance Journey with eTaxBook

From day one of your business idea to sustained growth — we partner with you at every compliance milestone with professional guidance, software solutions & audit-ready processes.

  • Business Registration & Licensing (Company/LLP/MSME/Shop Act/Drug License)
  • Accounting Setup with Software Guidelines & Compliance Management
  • Tax Planning, Audit & ITR Filing with Maximum Refund Strategy
  • Growth Management — Loan Projections, MSME Benefits & Expansion Support
  • Ongoing Compliance Partner — GST, TDS, EPF, ESI, RoC, Trademark & Beyond

Important Due Dates — AY 2026-27 (FY 2025-26)

Stay compliant — never miss a filing deadline. File on time. Stay compliant. Grow your business.

Due Date Filing / Compliance Applicable Act Remark
7th monthly TDS/TCS payment Income-tax Act — all deductors Interest 1% per month for delay in deduction; 1.5% per month for delay in payment, plus late fee/penalty as applicable.
10th monthly GSTR-8 CGST Act — e-commerce operators Late fee generally ₹200/day, subject to statutory caps; interest may apply on tax payable.
11th monthly GSTR-1 CGST Act — regular taxpayers Late fee generally ₹50/day, or ₹20/day for nil return, subject to applicable caps; interest on delayed tax.
13th monthly GSTR-1 IFF CGST Act — quarterly QRMP taxpayers Late fee may apply for delayed invoice furnishing; interest applies where tax payment is delayed.
15th monthly EPF and ESI contribution EPF Act / ESI Act — covered employers EPF damages and interest under the EPF scheme; ESI interest 12% per annum plus damages for delayed contribution.
20th monthly GSTR-3B CGST Act — regular taxpayers Late fee generally ₹50/day, or ₹20/day for nil return, subject to caps; interest generally 18% per annum on delayed tax.
22nd / 24th monthly GSTR-3B under QRMP CGST Act — quarterly filers Late fee and interest apply for delayed filing or tax payment; due date depends on the State/Union Territory group.
25th monthly PMT-06 tax payment CGST Act — QRMP taxpayers Interest generally 18% per annum for delayed tax payment, subject to applicable relief.
30th monthly GSTR-5 / GSTR-6 CGST Act — non-resident taxpayers / ISD Late fee generally ₹50/day, nil-return relief may apply; interest on delayed tax payment.
31st monthly Professional Tax / PT return State Professional Tax law — registered employers State-wise late fee, interest and penalty apply; Maharashtra dates depend on enrolment/registration type.
15 June, 15 Sept, 15 Dec, 15 Mar Advance tax: 15%, 45%, 75%, 100% Income-tax Act — companies and taxpayers liable to advance tax Interest under sections 234B/234C for deferment or short payment; penalty may apply for non-compliance.
30 Sept / 31 Oct Tax audit report and ITR Income-tax Act — audit cases, companies and firms Late filing fee under section 234F up to ₹10,000; interest under section 234A and other provisions may apply.
31 July Non-audit ITR Income-tax Act — individuals/HUF not subject to audit Late filing fee under section 234F up to ₹10,000 and interest under section 234A where tax remains payable.
30 Nov Transfer pricing report / ITR Income-tax Act — international or specified domestic transactions Penalty for failure to report under section 271BA and interest/late fee for delayed return.
30 Nov MCA annual return and financial statements Companies Act — companies Additional MCA fee generally ₹100/day of delay, plus director/company penalties as applicable.
Within 60 days of FY end LLP Form 11 annual return LLP Act — LLPs Additional fee generally ₹100/day of delay, with further penalties for continued non-compliance.
Within 30 days of AGM Company annual financial filing Companies Act — companies Additional MCA fee generally ₹100/day until filing; statutory penalties may also apply.
30 June / 31 Dec MLWF contribution Maharashtra Labour Welfare Fund Act Late payment interest, recovery and penalty may apply under Maharashtra rules.
As notified by State Shop & Establishment renewal / returns State Shops and Establishments Act — all establishments State-wise late fee and prosecution/penalty may apply; retain registers and notices.

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