Non-deductible taxes:

• Personal Income Tax: The Income Tax you pay yourself is not deductible from your taxable income.
• Customs Duty, Goods and Services Tax (GST), and other indirect taxes: These taxes are generally Income Taxtreated as expenses borne by consumers and cannot be deducted from taxable income.
• Fines and penalties: Any fines or penalties you pay for breaching laws or regulations are not deductible.
• Capital expenditure: Costs related to acquisition, improvement, or development of Income Taxassets is not deductible as expenses. However, depreciation on such assets can be claimed over their useful life.
• Personal expenses: Expenses like household expenses travel for personal reasons, or entertainment expenses are not deductible from business or professional income.

Taxes deductible at lower rates:

• Interest on borrowings Income Tax for personal purposes: The interest on loans taken for personal purposes like buying a car or paying for higher education is deductible only up to Rs. 2 lakh per year.
• Long-term capital gains: Gains from the sale of capital assets held for more than one year are taxed at a lower rate of 20% (as of 2023) compared to the marginal tax rate for income.
• Dividend income: The dividend Income Tax income received from Indian companies is subject to DDT (Dividend Distribution Tax) of 15% by the company itself. However, additional tax may be applicable depending on your income slab.
• Foreign income: Income earned outside India is generally taxed at a lower rate than domestic income under certain conditions.