India Tax & Regulatory Framework
India's tax system is governed by the Income Tax Act, 1961 and the Goods and Services Tax (GST) regime introduced in July 2017. The Central Board of Direct Taxes (CBDT) and Central Board of Indirect Taxes & Customs (CBIC) administer direct and indirect taxes respectively. Corporate tax rates are 22% for existing domestic companies (under Section 115BAA) and 15% for new manufacturing companies (Section 115BAB), while individual tax rates follow a progressive slab structure up to 30% (plus surcharge and cess).
GST is India's unified indirect tax, replacing multiple central and state levies. Businesses with turnover exceeding ₹40 lakhs (₹20 lakhs for services) must register under GST. The four-slab rate structure (5%, 12%, 18%, 28%) requires careful classification of goods and services. Monthly GSTR-1 (outward supplies) and GSTR-3B (summary return) filings are mandatory, along with annual GSTR-9/9C reconciliation. E-invoicing is mandatory for businesses with turnover exceeding ₹5 crores, requiring real-time invoice registration on the government portal.
Tax Deducted at Source (TDS) is a critical compliance requirement — businesses must deduct tax on payments for salaries, rent, professional fees, contracts, and more, file quarterly returns (Forms 24Q, 26Q, 27Q), and issue TDS certificates (Form 16/16A). Late filing attracts penalties of ₹200 per day, and non-deduction results in disallowance of the expense. PakalaTax manages the entire TDS lifecycle with automated rate determination and challan generation.
Companies registered under the Companies Act, 2013 must comply with Ministry of Corporate Affairs (MCA) requirements including annual filing of financial statements (AOC-4), annual returns (MGT-7), board meeting compliance, and statutory audit by a practicing Chartered Accountant. Our team handles all ROC filings, director KYC (DIR-3 KYC), charge registrations, and corporate restructuring documentation.