Income tax is one of the government’s most important taxes and is a major source of income for the government. Income tax is levied directly on an individual/organisation/company in order to get a share of the income. This money collected, in return will be put into various government programmes that are launched for the welfare of the people. Income Tax is one of the most actively contributed tax in India and creates the best government-people bonding towards nation building.
Filing income tax returns is the official way of legitimizing your income and earning from multiple sources.
Filing income tax returns is the official way of legitimizing your income and earning from multiple sources. Failing to file income tax returns, by default, means that you have not disclosed your income and wealth which is automatically considered as black money.
There are two types of incomes taxes, namely Direct Tax and Goods and Services Tax, which was enforced recently. Income from certain sources are taxable according to Income Tax of India and they are
It is important to plan your tax payment in a very systematic manner by making sure a person meets his tax obligations. This has to be done by keeping one’s social and financial status in mind and further consider your age, investment bracket and financial targets and goals.
An Indian citizen who is of any age below 60, is liable to pay appropriate income tax if the income they are earning is exceeding 2.5 lakhs. Even in those cases, if the person is above 60 and is earning more than 3 lakhs, that person is also liable to pay taxes to the government of India. Further, listed below are those who are liable to pay taxes.
Hindu Undivided Family (HUF)
Body of Individuals (BOI)
Association of Persons (AOP)
Local Authorities
Corporate firms
Companies
All artificial judiciary persons
The usual practice is to start collecting taxes only when the financial year comes to an end but to make it easier, and regulate the flow of funds to the government of India for various other programmes, the Income-Tax has enforced ways to pay taxes in advance during the running of the financial year itself. It was named as ‘Pay as you earn’ concept.
Tax planning is every citizen’s responsibility and it should be done with pride. It also calls for smart calculation of tax, considering deductibles, permissible exemptions and legally recognised reliefs, which are declared under the Income Tax Act. Saving up money by not paying to unnecessary expenses is also part of the tax planning process. Being smart will reduce your tax liability as a tax payer and eases your burden.
There are times when the tax payer tends to invest money in areas which are inefficient and unproductive tax saving channels. This is done by people who are unaware and ill-informed in order to evade tax or reduce it legally. Taru Financial Services will guide you through the process of tax planning keeping the interests of both the client and the country in mind.
Every citizen above a certain age, who has a source of income, irrespective of nature, is required to file their Income Tax Returns, even in cases where the individual’s income is lesser than the taxable bracket. Filing of IT returns is mandatory and is not associated with tax brackets and income of the individual.
Over the last few years, the Income Tax Department has been digitized by the government of India to ease the process of Income tax collection and Income Tax Returns filing. It has become way easier than before for individuals and organisations to pay their taxes online and track their history of payments through the different portals of Income Tax Department.
Income Tax paid by YOU will directly reflect on the nation building activities. This tax is a major source of income for the government to invest in the infrastructure, better governance and run various public welfare schemes and policies around the country. All tax payers are, in one way or the other, are contributing to the betterment of the country and a brighter future.
Income Tax for earning citizens depends on the income bracket that they fall in.(Age is >60)
| Income Tax Slabs | Lastname |
|---|---|
| Up to Rs. 2,50,000 | N/A |
| Income between Rs. 2,50,000 – Rs. 5,00,000 | 5% |
| Income between Rs. 5,00,000 – Rs. 10,00,000 | 20% |
| Income above Rs. 10,00,000 | 30% |
Income Tax for earning senior citizens (Age between 60 and 80)
| Income Tax Slabs | Lastname |
|---|---|
| Up to Rs. 3,00,000 | N/A |
| Income between Rs. 3,00,000 – Rs. 5,00,000 | 5% |
| Income between Rs. 5,00,000 – Rs. 10,00,000 | 20% |
| Income above Rs. 10,00,000 | 30% |
Income Tax for earning Super Senior Citizens (Age >80)
| Income Tax Slabs | Lastname |
|---|---|
| Up to Rs. 5,00,000 | N/A |
| Income between Rs. 5,00,000 – Rs. 10,00,000 | 20% |
| Income above Rs. 10,00,000 | 30% |
The responsible tax payers are also eligible for certain tax exemptions and deductions upon the tax paid. Below mentioned are few of the most important and revered.