What is Income Tax? a comprehensive guide

What is Income Tax? Income tax is a direct tax levied by the government on the income of individuals and other entities. Indian residents are required to consider their income from India as well as abroad during tax filing; Whereas, foreigners are taxed only on their income from India. Different types of income and amounts of entities other than corporate bodies are placed under different income heads and slab rates.

revenue:

What are the sources of income under What is Income Tax?

Apart from certain exemptions and deductions, almost all income earned during the previous year such as salary, business, profession, rental property, sale of property, interest etc. is subject to income tax. Following are the 5 categories under which income needs to be classified.

1. salary income
2. income from house property
3. income from business or profession
4. income from capital gains
5. Income from other sources.
6. What is Income Tax? read more

How is income calculated for income tax purposes?

Need to seek professional advice from CA for computing taxable income or income tax consultant For the taxability of various transactions and required experts to calculate the net income from each head of income. Under an income tax, there are various provisions and schemes for computing income tax return filing For different types of evaluators. Below is an overview to have a brief idea about the taxable amount computed under various heads of What is Income Tax?

Return

Who is required to file Income Tax Return?

income tax return ,ITR) is the form which is filled and submitted by the taxpayers with the Income Tax Department to declare their earned income and tax payable.

Is it mandatory for every citizen to file ITR?

In any of the following situations (as per the Income Tax Act), it is mandatory for you to file Income Tax Return in India.

1. Your gross total income (before allowing any deduction under section 80C to 80U) exceeds Rs 2.5 lakh in FY 2019-20.
2. You are a company or a firm, irrespective of whether you have income or loss during the financial year
3. You want to claim refund of TDS.
4. You want to carry forward the loss on account of income
5. If you are a resident individual and you have property or financial interest in an entity located outside India.
6. If you are a resident and signing authority in a foreign account. You are required to file income tax return when you are receiving income from property held under trust for charitable or religious purposes or a political party or a research association, news agency, educational or medical institution, trade union. Not-for-profit university or educational institution, a hospital, infrastructure loan fund, any authority, body or trust
7. If you are a foreign company availing treaty benefits on any transaction in India
8. Proof of return filing may also be required when applying for a loan or visa

What are the due dates for filing Income Tax Return?

What are late fees and interest?

The late fee for not filing ITR FY 2019-20 is given in the table below-

In addition to penalty for late filing, interest under section 234A at 1% per month or part thereof will be charged till the date of payment of taxes and knowing what the income tax is.

Payment

What is the rate of income tax for individuals

When is tax to be paid?

If the total tax liability of an individual in a financial year is Rs 10,000 or more then you have to pay advance tax. Advance tax is applicable to all taxpayers, salaried, self-employed and businesses. Senior citizens, who are 60 years of age or more, who do not run a business, are exempted from paying advance tax.