Income Tax in India - the amount of tax


Posted July 10, 2019 by Jackson996

Income tax is the amount of tax that's paid by employees and business men on their income. There's absolutely not any age limitation for a individual to be responsible to pay income taxation.

 
Income tax is the amount of tax that's paid by employees and business men on their income. There's absolutely not any age limitation for a individual to be responsible to pay income taxation. You've got to pay tax whether you are working or even a pensioner if your income is more than a particular degree but when your yearly income is below a specific level, no tax is imposed on you. Income taxation in India is charged according to type of income for instance income, pension income, social security income, low-income earnings in the business or livelihood, property income, savings and investment income and other miscellaneous income. Filing for tax return in India depends upon the residential area of someone. Three varieties of residents are largely considered based upon their stay in India.

Kinds of taxpayers for income tax return

1. Usually Residents: a man or woman who resides in India for at least one hundred and eighty-two days of a financial year and he has to pay tax.
2. Non- ordinarily Residents: a man or woman who doesn't live in India for at least one hundred and eighty-two days of a fiscal year. He has to pay tax for the earnings accumulated in India.
3. Non Residents: a man who stayed outside India for 7 to 9 years is thought of as non resident. He's qualified to income tax just for income generated in India.

Income exempted from income taxation India for Assessment Year 2010-11

The income of following individuals/sources is exempted to file sales tax return.

1. Men taxpayers who make Up to Rs. 1, 60,000.
2. Ladies citizens who earn around Rs. 1, 90,000.
3. Senior citizens who are 65 years old or over having earnings Up to Rs.2,40,000
4. Income obtained by agricultural can be exempted from income-tax
5. The investments made in Central Government Health Scheme (CGHS) are all regarded as tax free.
6. The tax reduction of Rs. 20,000 is granted for investments in certain investment bonds.

Tax Rates for earnings tax India

1. Tax rate is 10% if taxable income is involving Rs.1, 60,001 into Rs. 5, 00,000.
2. Tax rate is 20% when income is between Rs.5, 00,001 into Rs. 8, 00,000.
3. Tax rate is 30 percent if income exceeds from Rs. 8, 00,001.
4. Surcharge of 10 per cent of the entire tax liability is applicable if total income is over Rs 1,000,000.
5. The basic tax rate is 35% with 2.5% surcharge for national businesses
6. Foreign corporations pay tax in a basic tax rate of 40% with 2.5percent surcharge.
7. Additionally, education cess is appropriate at the rate of 3% over the income taxation.
8. Wealth tax at the rate of 1% is applicable for Corporates when their net wealth surpasses Rs.1.5 mn.

Section 80C Deductions

In accordance with Sec 80C of the Income Tax India the qualifying investments of around Rs. 1 Lac are deductible from income tax. A few Qualifying Investments that are regarded as allowable in are given below.

1. Provident Fund (PF): The payments that are created to Provident Fund are counted because deductible according to Sec 80C Deductions.
2. Voluntary Provident Fund: Under section 80C Voluntary Provident Fund also qualifies for deduction.
3. Public Provident Fund:
4. The payments which are created to Public Provident Fund will also be considered as tax free from Section 80C Deductions of income tax India. The branches of Rs. 500 into Rs. 70,000 annually are allowed for Public Provident Fund.
5. Life Insurance Premiums: Any amount paid for life insurance premium is included in Section 80C deduction.
6. Equity Linked Savings Scheme: some mutual fund schemes known as Equity Linked Savings Scheme are eligible for deduction under Sec 80C.

Some other avenues like National Savings Certificate, Infrastructure Bonds, Pension Funds, Bank Fixed Deposits, Post Office Time Deposit Account, children's education expense are declared as deductions under Sec 80C.

Tax Penalties

There are a good deal of defaults in filing income tax return that can tempt cost of penalty. A few essential defaults are cited here temporarily.

1. The default in making payment of tax, origin of tax deduction, advance tax or the self assessment tax.
2. Non payment of advance tax as directed by the Assessing Officer.
3. To hide actual specifics of revenue.
4. Failure to keep prescribed books of account and documents of business properly.
5. Failure to file tax return required.
6. Failure to make income tax return in due time.

The Commissioner of Income-tax has authority to reduce or give up the amount of imposed penalty and the amount of penalty is contingent on the nature of default.

The infrastructure of section of income tax India is well organized and consists of a Group of Chairman, Board Members of Direct Taxes, Chief Commissioner, Commissioner, Additional Commissioner, Joint Commissioner, Deputy Commissioner, Assistant Commissioner, Tax Officer, Tax Inspector, Tax Assistant and Constable.
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Issued By Stephanie C. Rowland
Country United States
Categories Accounting , Agriculture , Automotive
Tags income tax e filing
Last Updated July 10, 2019