What is Income Tax?
Income Tax is a direct tax that is levied on any individual’s or entity’s income during a financial year. It is directly paid to the government, like all the other direct taxes (Wealth Tax, Estate Tax, Corporate Tax, and Capital Gain Tax). The net taxable income is considered to calculate the tax liability of the individual or entity based on the income slabs provided by the Income-tax Department for the current financial year. The amount of tax paid depends on the money earned by the individual in that particular financial year.
Direct tax can be defined as a type of tax in which the incidence and impact of the tax are levied on the same person. It can be further explained as a type of tax in which the liability of paying the tax cannot be shifted to someone else.
- What is Direct tax?
- What is Indirect Tax? Features and Types
- Difference between Direct and Indirect Tax
- Corporate Tax: Meaning, Corporate Tax Rate, Corporate Tax Rebates
- What is Capital Gain?|Types and Capital Gains Tax Exemption
- What is Short Term Capital Gains Tax (STCG)?
- What is Long Term Capital Gains Tax (LTCG)?
- What is Income Tax? | Tax Slab | Deductions Allowed
- How to calculate Income Tax on salary (with example)?
Income Tax Slab Rate
- New Income Tax Slab for FY 2023-24
Income Tax Exemptions and Deductions
- Income Tax Exemptions and Deductions for Salaried Individuals
- What is House Rent Allowance? |How much exemption can be claimed on HRA ?
- What is Section 80C ? | Deductions under 80C
- Exempted Income: Meaning, and Types
- How I invested my 10 lakhs salary to get the maximum return in 2023 ?
How to Save Tax?
- How to Save Tax in FY 2023-24?
Filing of ITR
- Types of ITR | Which ITR Should I File?
- How to File ITR?
- Tax Deducted at Source | TDS Full form, Types, Filing, Return and Due Dates
Documents required to file ITR
- Documents required to file ITR
- Permanent Account Number | Full Form of PAN, Format, Eligibility and Types
- What is Form 16? | How to download Form 16?
- Annual Information Statement (AIS) | Features and How to Check AIS ?
- What is Form 26AS ?
- Difference between AIS and Form 26AS
- What is Salary Slip?
- Salary Slip Format
- What is GST? Types, Features, Benefits, Input Tax Credit, GST Council
- Canons of Taxation
1. Why is Income Tax collected?
There are various reasons for which income tax is calculated; for example, to pay off the salaries of state and central government employees and to meet infrastructural expenses. Simply put, it is the source of income for the government with which it takes care of the development of the country.
2. Who should pay Income Tax?
All the individuals have to compulsorily file ITR if their annual income exceeds ₹2.5 lakh p.a. The limits exceeds to ₹3,00,000 for senior citizens and ₹5,00,000 for senior citizens. List of people who are required to file ITR consists of:
- Artificial Judicial Person
- Corporate Firms
- Association of Persons (AOPs)
- Hindu Undivided Families (HUFs)
- Local Authorities
- Body of Individuals (BOIs)
3. What are the different types of income based on Tax criteria?
Every type of income that is earned by any individual or firm residing in India is taxable if it comes under the tax slab according to the Income Tax Act 1961. The five major categories in which income is divided are:
- Property Income
- Salary Income
- Business of Profession Income
- Capital Gain Income
- Income from Other Sources
4. What is the Income Tax Slab Rate for the Financial Year 2023-24 (according to the New Tax Regime)?
Up to ₹3,00,000
From ₹3,00,001 to ₹6,00,000
From ₹6,00,001 to ₹9,00,000
From ₹9,00,001 to ₹12,00,000
From ₹12,00,001 to ₹15,00,000
Income above ₹15,00,001
5. What is the due date for filing income tax returns? Is it the same for all taxpayers?
All individuals and assesses whose accounts do not require auditing must file their income tax returns by July 31. All the companies, individuals, and working partners whose accounts are audited must file their income tax returns by September 30. However, the assesses who do not have to submit a report under Section 92E of the Income Tax Act must file their income tax returns by November 30.
6. Where should I invest to save Income Tax?
There are various instruments in which one can invest to save tax. Some of the common investment options include Equity Linked Savings Scheme (ELSS), Employee’s Provident Fund, Public Provident Fund, 5-Year Bank Fixed Deposit, Mutual Funds, Recurring Deposit (RD), and Investment in Stocks.
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