Before starting in deep you must know about income tax, what’s that and why we are paying? After reading this full article you will understand —-
What is income tax
Basically, anybody with an income is liable to file income tax returns. Today we bring to you the basics of income tax you’ll need to equip yourself with and this should help you take a confident first step into your knowledge about income tax. There are 2 types of income
|EARNED INCOME||UNEARNED INCOME|
|SALARY,WAGES,TPS,BONUSES,COMMISSION ETC.,||DIVIDEND,INTEREST,RENTS,WINNING,ROYALTIES ETC.,|
The amount of money you pay to the government to how much you earn
Every individual incurring different tax to them according to their income .
It’s annual tax.
What is previous year& Assessment year?
Now I’m going to teach about P.Y and A.Y its very boring to read paragraph that’s why for your better understanding just go up through diagram.
Our current year(2019-2020) keeping in this mind im going to explain previous year and assessment year.
|PREVIOUS YEAR||2018-2019||Previous year is a period in which a person have to pay tax.||1st April 2018 to 31st march 2019|
|CURRENT YEAR||2019-2020||Current year is a period which are going on.||1st April 2019 to 31st march 2020|
|ASSESSMENT YEAR||2020-2021||Assessment year is a upcoming year.||1st April 2020 to 31st march .|
NOTE : Current year also known as FINANCIAL YEAR . and last date of filling your income tax return is 31st july.
Understanding your salary?
SALARY: This kind of pay is paid by monthly or weekly.It mostly express as an annual gross figure(before tax and other deductions)
When you start any new job and receive your Salary details/Pay slip/Tax statements. Here all details related to your salary provided and you will understand where tax are deducted and for what.
Income in which you pay tax?
The salary income You received, you may be earning an income from several other sources. For example
- Income from salary
- Income from house property
- Income from capital Gain
- Income from business or Profession
- Income from other Sources
All heads have different tax payable in this I’m explaining only
|INCOME TAX SLAB|
INDIVIDUAL (aged below 60 years)
SENIOR CITIZENS(Aged 60 years above and below 80 years)
SUPER SENIOR CITIZENS(Aged 80 years and above)
|Income up to 2.5L|
|Income 2.5L- 3L|
|Income 3L -5l|
|Income 10L and above|
NOTE: Income 2,50,001 to 3,00,000 upto 2.5l nil rs1 also taxable .
A deductions is any items or expenditure subtracted from gross income to reduce the amount of income subject to income tax. It is also referred to as an “ALLOWABLE DEDUCTIONS” For examples.—-
- Medical expenses
- Charitable contributions.
- Rent,school fee
- Miscellaneous deductions etc…,
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