• Basic Income Tax

    Reporter: Adhyan Guruji
    Published: Sunday, January 2, 2022
    A- A+

     

    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


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