GST vs Income Tax: Key Differences Every Business Owner Should Understand
By KCJM, Chartered Accountants | Excellence in Everything We Do
Every Indian business—whether a startup, SME, or corporation—must comply with a range of tax laws, most notably Goods and Services Tax (GST) and Income Tax. While both are essential, they are fundamentally different in their application, purpose, and compliance procedures.
At KCJM, Chartered Accountants, we specialize in simplifying tax compliance for businesses. In this blog, we break down the critical differences between GST and Income Tax that every business owner must understand.
📌 What is GST?
GST is a unified, multi-stage indirect tax levied on the supply of goods and services across India. It is destination-based and replaced multiple previous indirect taxes like VAT, Service Tax, and Excise Duty.
- Administered by: Central and State Governments
- Collected on: Sales/turnover of goods and services
- Returns: GSTR-1, GSTR-3B, etc.
📌 What is Income Tax?
Income Tax is a direct tax imposed on the income earned by individuals, HUFs, companies, and other entities.
- Administered by: Central Board of Direct Taxes (CBDT)
- Collected on: Net taxable income
- Returns: ITR-1 to ITR-7 depending on entity type
🧾 Key Differences Between GST and Income Tax
| Particulars | GST | Income Tax |
|---|---|---|
| Nature of Tax | Indirect Tax | Direct Tax |
| Levied On | Sale of goods & services | Profit or income earned |
| Applicable To | All businesses with turnover above threshold | All income-earning individuals and entities |
| Filing Frequency | Monthly/Quarterly + Annual | Annually (plus advance tax payments) |
| Compliance Portal | gst.gov.in | incometax.gov.in |
| Return Types | GSTR-1, GSTR-3B, GSTR-9, etc. | ITR-1 to ITR-7 |
| Due Dates | 10th, 20th/22nd of each month; 31st Dec (Annual) | 31st July/30th Sept (depends on audit requirement) |
| Audit Requirement | GST Audit if turnover exceeds ₹5 crore | Tax Audit if turnover exceeds ₹1 crore (for business) |
🔍 GST and Income Tax: How They Interact
While these taxes are distinct, there are interplays:
- 📌 GST payments and ITC affect profit computation and thus income tax liability.
- 📌 Income tax audit often includes GST compliance review.
- 📌 Discrepancies between GST turnover and income reported in ITR may trigger scrutiny.
KCJM Tip: Always reconcile GST returns with books of accounts and income tax filings to maintain consistency and avoid notices.
⚠️ Common Mistakes to Avoid
- 🚫 Reporting different turnover in GSTR and ITR
- 🚫 Ignoring ITC reversals in profit computation
- 🚫 Missing due dates for advance tax or GST returns
✅ How KCJM Chartered Accountants Can Help
We offer end-to-end tax compliance services for businesses of all sizes, including:
- 📊 GST registration, return filing, and advisory
- 🧾 Income Tax return filing and tax planning
- 📋 Reconciliation and audit support
- 🔍 Handling GST and IT notices or scrutiny cases
💡 Want a tax-compliant and financially efficient business? Talk to our experts today.
🌐 https://kcjm.in
📧 support@kcjm.in
📞 Partner with KCJM, Chartered Accountants—India’s trusted advisors in GST and Income Tax matters.
Keywords: GST vs income tax India, difference between GST and income tax, business tax compliance, KCJM Chartered Accountants, GST vs direct tax, GST and ITR reconciliation, tax audit requirements
