📌 Introduction
In India, income tax is a direct tax levied by the Central Government on the income earned by individuals and entities during a financial year. The tax liability is governed by the Income-tax Act, 1961, and it applies to a wide category of taxpayers based on their income, residential status, and entity type. Let’s understand who is required to pay income tax in India for the Financial Year 2024-25 (Assessment Year 2025-26).
📌 Who is Liable to Pay Income Tax in India?
As per the provisions of the Income-tax Act, 1961, the following persons are liable to pay income tax if their income exceeds the prescribed basic exemption limit:
✅ 1️⃣ Individuals
- Resident Individuals
- Must pay income tax if their total income exceeds the basic exemption limit.
- Exemption limits for FY 2024-25 (under old tax regime):
- Below 60 years: ₹2.5 lakh
- Senior Citizens (60–80 years): ₹3 lakh
- Super Senior Citizens (above 80 years): ₹5 lakh
- Under the new tax regime (Section 115BAC), the basic exemption limit is ₹3 lakh for all individuals.
- Non-Resident Individuals (NRIs)
- NRIs are taxed on the income earned or received in India.
- Income earned outside India is not taxable for NRIs.
✅ 2️⃣ Hindu Undivided Family (HUF)
- A HUF is treated as a separate entity for income tax.
- Taxed as per individual slab rates.
- Required to file ITR if total income exceeds ₹2.5 lakh (old regime) or ₹3 lakh (new regime).
✅ 3️⃣ Companies
- Domestic companies are taxed at a flat rate:
- 25% (if turnover is up to ₹400 crore in the previous year)
- 30% (if turnover exceeds ₹400 crore)
- Foreign companies are taxed at 40% on income earned in India.
✅ 4️⃣ Firms (including LLPs)
- Taxed at a flat rate of 30% on total income.
- Subject to surcharge and health & education cess as applicable.
✅ 5️⃣ Association of Persons (AOP) / Body of Individuals (BOI)
- Taxed either at slab rates or flat rates based on certain conditions.
- If total income exceeds the basic exemption limit, liable to pay tax.
✅ 6️⃣ Artificial Juridical Persons
- Entities like trusts, societies, and clubs are taxed at a flat rate of 30%.
📌 Income Subject to Tax in India
Under Section 5 of the Income-tax Act, 1961, taxability of income is based on the residential status:
| Residential Status | Income Taxable in India |
| Resident | Global Income |
| NRI / Non-Resident | Income earned or received in India |
What are the Basic Exemption Limits?
| Category | Old Tax Regime | New Tax Regime (115BAC) |
| Individuals (<60 years) | ₹2.5 lakh | ₹3 lakh |
| Senior Citizens (60–80 years) | ₹3 lakh | ₹3 lakh |
| Super Senior Citizens (80+ years) | ₹5 lakh | ₹3 lakh |
📌 Conclusion
Anyone whose taxable income exceeds the prescribed limit must pay income tax in India. Whether you’re an individual, NRI, HUF, company, or firm — the Income-tax Act, 1961 specifies your obligations. It’s crucial to understand the latest tax slab rates, available exemptions, and deductions while calculating your liability.
📌 Frequently Asked Questions
- Is it mandatory to file ITR if income is below ₹2.5 lakh?
➡️ No, unless you fall under specific mandatory filing criteria like having foreign assets or paying TDS. - Do NRIs have to pay tax in India?
➡️ Yes, but only on income earned or received in India. - What is the due date for income tax filing for FY 2024-25?
➡️ 31st July 2025 (for non-audit cases) and 31st October 2025 (for audit cases).
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