Basics of Income Tax
What
is Income Tax?
Income Tax is a tax charged on Income earn during the year
·
It pay
directly to the government basis your income or profit.
·
It is collected by central Govt.
·
It is based on Income Tax ACT, 1961
Type
of Tax
·
Direct Tax – Income Tax is Direct Tax, Person paid tax directly to the
government and it is levied on profit and income.
·
Indirect Tax – Indirect Tax is levied on Goods and Services, Person Collect tax
from customer and Pays to Government.
E.G. Hotel Bill, or Purchase Any Product (GST Include).
Types
of Income under Income Tax
1. Income From Salaries
o
(Income
from Salary)
2. Income From Capital
Gains
o
(Profit
from Sale of Assets (Land, Building, Jewelry, Bond, Debenture etc…))
3. Income From House Property
o
(Income
from House (E.g. Rent))
4. Income (Profit) From Business
(PGBP)
o
(Income
from Business)
5. Income From other
Source
o
(Lottery/Quiz
Winning, interest income, Commission (one
Time), Part time Tuition fees ,Income from Dividends, Gift received )
Note - If any income not falling under any heads are taxable
under income from other
sources
·
All
above mentioned income to form Gross
Total Income as Shown Below.
|
Particular |
Amount |
|
Income from
salaries |
- |
|
Income from
capital Gains |
- |
|
Income from house
property |
- |
|
Profit and Gains
of Business and Profession |
- |
|
Income from other
source |
- |
|
Gross Total Income |
- |
Financial
Year / Assessment Year
·
Financial Year – Financial Year (FY)
is the year in which you earn your income and also pay your taxes on this
earned income. Financial year start from 1st Apr and ends on 31st
March.
·
Assessment Year - Assessment year that year which one file income tax return of the financial
year.
Suppose Today’s Date is 30-Jan-2021, and tax payer want to fill income tax return.
·
1st
Apr 2020 – 31st Mar 2021 - is Assessment Year
·
1st
Apr 2019 – 31st Mar 2020 – is Financial Year
Next
Good knowledge
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