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Income Tax Filling

Income TAX

What is Income Tax?

 

Income tax is a type of charge that the government charges on the basic income earned by individuals and businesses during a financial year. Income tax in India is the government’s greatest revenue source. For every 1 rupee that the government collects, 68 paisa comes through taxes.

The revenue that the government collects through Income Tax is then used to fund various central government schemes that the government comes up with. A part of the revenue is also invested in defense expenditure. So, the basic idea of imposing a tax is to collect money from the people of India- for the people of India. It is used to provide the people of India with better educational, medical, and social facilities. The government uses the revenue generated by this for the betterment of the people of India.

 

Apply for Income Tax Filling

Types

Tax in India can be classified into two categories, i.e. Direct Tax and Indirect Tax. Direct Tax is the tax that the government imposes directly on the income of an individual or an organization. Whereas, the indirect tax (or GST) is collected as soon as a consumer buys a product. The value of the added tax is already included in the product’s price.

 

TYPES OF TAXPAYERS

 

Not only the taxes but the taxpayers can also be classified into three basic categories. The three basic categories may include:

  • Individuals,
  • Firms and,
  • Companies.

 

Further, the people are broadly classified into two categories, i.e., resident and non-resident. The people who fall under the criteria for being a resident need to pay Income Tax on the income that they earn globally (i.e., in India and abroad). The people who are classified as non-residents, just need to pay Income Tax on the income that they generate in India.

Based on age, the people are classified into three different categories which are as follows:

  •  age <60 years.
  • ages between 60-80 years.
  • age >80 years.

 

 Income heads in India

 

Income heads are the sources of Income that people use to generate income. Every earning person falls in one or the other section of these categories.

There are five Income Heads as per the Income Tax department of India. They are as follows:

  • Income from salary– people earning through salary and pension are taxable under this income head.
  • Income from house property – income earned through renting property is taxable under this income head.

 

  • Income from businesses and self-practicing professions– Income earned by self-employed people and also income earned by professionals such as CAs, doctors, lawyers who have a practice of their own is taxable under this income head.

 

  • Income from capital gains– Income earned from capital assets such as mutual funds, shares is taxable under this Income Head.

 

  • Income from other sources– income earned from savings accounts interest, FDs is taxable under this income head.
Penalty and Benefits

Penalty for late filing of Income Tax

 

As of section 234F, any individual who does not pay the IT well within time is liable to pay a maximum penalty of 10,000 rupees.

 

Benefits of filing Income Tax within the due date

 

Filling your IT within time, not only makes you an asset citizen of India but there are further benefits which have been listed below:

  • Easy loan approvals

Filling IT well within time helps individuals get a vehicle and home loans easily.

 

  • Quick Visa verification

Filling IT within time speeds up the VISA verification process.

 

  • Claim Tax refund

Filling IT within time helps you get a refund which the IT department holds of you.

 

  • Address and Income proof

The ITR can be used as an address and Income proof.

Income Tax Slabs

Income tax slabs

 

The income of citizens is categorized in different categories called tax slabs. The tax rate for each Tax slab is different. The new IT Slab rates are as follows:

  • 0-2.5 lakhs – no tax needs to be paid.
  • 2.5 lakhs to 5 lakhs – 5 % of the income.
  • 5 lakhs to 7.5 lakhs – 12,500 + 10% of the income exceeding 5 lakhs.
  • 7.5 lakhs to 10 lakhs –  37,500 + 15% of the income exceeding 7.5 lakhs
  • 10 lakhs to 12.5 lakhs – 75,000 + 20% of the income exceeding 10 lakhs.
  • 12.5 lakhs to 15 lakhs – 125000 + 25% of the income exceeding 12.5 lakhs.
  • Above 15 lakhs – 187500 + 30% of the income exceeding 15 lakhs.

Filling INCOME TAX

 

Paying tax is a truth that cannot be denied and one has to fill the IT on the amount of income that they generate.  Now, the process of Income Tax filling cannot be aborted, but the amount of tax that needs to be paid can be looked upon. Many people pay income tax more than they are required to. IT amounts can be reduced to a certain extent if the income and the expenses are calculated carefully. The calculating process is complicated. Moreover, the changing ways in Income Tax filling may also be an issue for you. But, we do have a team of experts who can look upon the same on your behalf.

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