Income tax is a direct tax levied on Income of taxpayer and governed by Income Tax Act 1961, This act provide sections and rules according to which income is calculated of taxpayers. Act provides which income to be taxable in India, Exempted income (income which is not taxable in India), deduction from Income, penalty for delay payment of tax or delay filing of return, search and seizure, how assessee can appeal, matter or issue which are appeal-able etc.
Income of taxpayer is calculated under five heads of Income as follows: –
- Incomes from Salary
- Income form letting out any house property
- Income form Capital Gain
- Income form Business and Profession
- Income from Other Sources
Here income means the actual income that is gross receipts less expenditure incurred and income also includes casual income like winnings from lotteries, crossword puzzles etc.
ABILITY TO PAY
It is an economic concept that means pay the tax according to income the higher the income is higher will be the ability to pay the taxes.
The tax rate may increase as taxable income increases (referred to as graduated or progressive rates). The tax imposed on companies is usually known as corporate tax and is levied at a flat rate. However, individuals are taxed at various rates according to the band in which they fall. Further, the partnership firms are also taxed at flat rate. Most jurisdictions exempt locally organized charitable organizations from tax. Capital gains may be taxed at different rates than other income. Credits of various sorts may be allowed that reduce tax.
Liability to file return of income under the following circumstance, If your gross annual income is more than-
|For individuals below 60 years||Rs 2.5 Lakh|
|For individuals above 60 years but below 80 years||Rs 3.0 Lakh|
|For individuals above 80 years||Rs 5.0 Lakh|
How many types on Income tax return?
- ITR 1- For resident individual who has income below 50 lakhs from salary/pension, other sources, one house property.
- ITR 2- Any income from ITR 1 above 50 lakhs, capital gains, more than one house property and foreign income and assets
- ITR 3- Every income from ITR 2, business profession, as a partner in a firm and presumptive income above 50 lakhs
- ITR 4- Every income from ITR 1 presumptive income under salary/pension, other sources, one house property, total income above 50 lakhs
- ITR 5- Applicable to firms, LLP, AOP and BOI.
- ITR 6- Applicable to Companies who are not claiming exemption under section 11
- ITR 7- Applicable to Charitable Trust
INCOME TAX SLAB SYSTEM
|INCOME TAX SLAB
|INCOME TAX RATES|
|INCOME LESS THAN 2.5 LAKHS||NOT APPLICABLE|
|INCOME GREATER THAN 2.5 LAKHS BUT LESS THAN 5 LAKHS||5% OF AMOUNT EXCEEDING Rs 2.5 LAKHS|
|INCOME GREATER THAN 5 LAKHS BUT LESS THAN 10 LAKHS.||20% OF AMOUNT EXCEEDING Rs 5 LAKHS|
|INCOME GREATER THAN Rs 10 lakhs||30% OF AMOUNT EXCEEDING Rs 10 LAKHS|
How to file Income Tax Return
To get more information about income tax return, write a email to firstname.lastname@example.org or send a text message or whatsapp to +91 9910000833.
- Income Tax Return filing Click here