Income Tax - Know More

Income Tax

Income tax is a direct tax imposed by the government and is mandatory to be paid by every earning individual. Therefore it is safe to say that every earning human being is entitled to file this tax and hence, help the government to raise funds and let them serve general public including all the earning individuals in return. One can easily imagine the importance of Income Tax seeing that every earning individual is entitled to it. It is, therefore, necessary to understand the concept of Income Tax. It is one of the main sources of revenue for the government. All these terms and rules are based on Income Tax Act, 1961 and Income Tax rules, 1962 and is managed by Ministry of Finance and CBDT (Central Board Of Direct Taxes). Discussed below in detail is what is Income Tax and how deeply you are affected by it.

As already stated, Income Tax has to be given by every earning individual but the tax that has to be given varies on your income. It basically depends on your Annual income. The assessment year starts from April first to which you are entitled to give tax of the previous year. Let's say for an example if previous year is First of April 2015 to Thirty-First of March 2016, then the assessment year will be the year in which you will submit your tax for the previous year and it will start from First of April 2016, technically speak.

Taxes are generally collected by the government in these  ways;

Voluntary payment by taxpayers like an advance tax.

Taxes Deducted at Source (TDS). The tax which is deducted from your monthly salary.

Taxes Collected at Source (TCS).

The rate at which you have to pay the tax is different, it not only depends on your income but also on your age and gender and is generalized below;

For a male below 60 years;

                    (Total Income=I)

I < 2,50,000              -NIL-

50.000<I<5,00,000 10% of the amount by which it exceeds Rs.2,50,000.

5,00,000<I<10,00,000 20% of the amount by which it exceeds Rs.5,00,000.

I>10,00,000             30% of the amount by which it exceeds Rs.10,00,000.

For a Female below 60 Years;

      (Total Income=I)

I < 2,50,000                         -NIL-

50.000<I<5,00,000 10% of the amount by which it exceeds Rs.2,50,000.

5,00,000<I<10,00,000  20% of the amount by which it exceeds Rs.5,00,000.

I>10,00,000             30% of the amount by which it exceeds Rs.10,00,000.

    3. For Individuals above 60 years but below 80 years;

                   (Total Income=I)

I<.3,00,000. -NIL-

3,00,000 <I<.5,00,000. 10% of the amount by which it exceeds Rs.3,00,000.

5,00,000 <I<10,00,000. 20% of the amount by which it exceeds Rs.5,00,000.

I>10,00,000. 30% of the amount by which it exceeds Rs.10,00,000.

For all individuals above 80 years;

                    (Total Income=I)

I< 5,00,000. -NIL-

5,00,000 <I<10,00,000. 20% of the amount by which it exceeds Rs.5,00,000.

I>10,00,000. 30% of the amount by which it exceeds Rs.10,00,000.

        5. Also,

A Partnership firm is to submit 30% tax for the financial year 2015-16.

A Local Authority is to submit 30% tax for the financial Year, 2015-16.

A domestic company is to submit 30% tax for the assessment Year 2015-16.

Analyzing all this information, we can conclude that Income Tax indeed plays an important role in each of our lives, it affects not only one's companies but each one of us individually. It's our responsibility to pay Income tax on time and not only avoid penalties but help the government to serve us better. You can always seek help and get income tax return filing on time easily.