Income tax in India is quite easy to understand. In contrast many think it is not so. But we have to approach the topic in right manner.
Therefore we wanted to make the people certainly understand the topic. So, we are providing herewith the content related to Indian Income tax.
First of all, let’s see the topics we are going to cover :-
- Whether you are liable to pay tax in India?
- On what income you have to pay tax?
- What is the tax rate applicable for you?
- When you have to make the tax payment?
- How can you make the tax payments online?
- Why and how to file your tax return in India?
Who is liable to pay tax in India?
The simple answer to the question is ‘person’.
In contrast, the definition for this word ‘person’ as per Income tax Act is … quite a big list.
Let’s see what are they:-
- an Individual
- a Hindu Undivided Family
- a Company
- a Firm
- an AOP (Association of persons) / BOI (Body of Individuals)
- a Local Authority, and
- every Artificial Juridical Person
Probably we will fall with in any of the above category.
So, the next step is to check whether you have taxable income.
What is taxable income in India?
It is another big list. Almost every income is certainly included.
- Profits and Gains,
- Voluntary Contributions received by a trust or an institution,
- Salary, performance allowance, compensation,
- Income from trade, profession or similar association,
- Profit on sale of Import Licence, Cash Assistance from Government, Duty drawbacks,
- Any interest, salary, bonus, commission, remuneration, etc. received by a partner from the firm,
- Profit and Gains of Mutual Insurance Company/ Co-operative Society,
- Capital gains,
- Winnings from lotteries, crossword puzzles, races including horse races, card/other games,
- Any sum received from Provident Fund or Super-Annuation Fund, Keyman Insurance Policy,
- Any sum received, without consideration, by an Individual or HUF.
Furthermore, the above definition of income is only an inclusive definition.
Even more, any other income not specifically mentioned is also chargeable to tax.
What is the tax rate applicable?
Above all, tax rate is enacted by Central Act for every Assessment Year.
Tax rates vary based on age, income sources, total taxable income, etc. Furthermore you can claim tax deductions also.
Consequently we have to check the applicable,
- income tax slabs,
- tax deductions, and
for every year.
Certainly it is not an easy task.
Due to that we are here to update you, all the information related to income tax in India.
When you have to make the tax payment?
Tax payment is made for the previous year, subject to certain exceptions.