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Questions (FAQs) on
What is Income Tax ?
Income tax or the tax on Income is a kind of direct tax that is paid on the income received. There are 2 cases on of taxes on Income.
Individual Income Tax – Any individual person or a HUF Hindu Undivided Family or any taxpayer other than companies have to pay taxes on the income earned during the financial year.
Corporate Tax – Any companies has to pay taxes on the profits they make from their businesses operations.
Anyone and everyone who earns an income is subject to income tax as per the Income tax laws.
What are the Income Tax Slabs ?
Though Income tax slabs keep getting revised and modified every year by the Ministry of Finance during the annual budget, still the current applicable slabs of Income Tax are as below :
Annual Income Range
Up to Rs.2.5 lakhs
Rs 2.5 lakhs to Rs 5 lakhs
Rs 5 lakhs and Rs 10 lakhs
More than 10 lakhs
What are Income is included for Income Tax purposes ?
For the purpose of Income Tax accounting, Income from following sources are accounted together.
Income from House/Property rental
Profits and Gains from Business or Profession
Capital Gains on investments such as real estate, equity, MF etc
Income from other Sources
There are certain standard deductions which are non taxable and then certain tax savings investment as per Income Tax act also qualify for Income tax rebates.
What rules and byelaws govern Income Tax in India?
Income Tax Act, was enacted in the year 1961 by the legislature for governing and administering income taxes in India. Further in the year 1962, the byelaws, rules & regulations for Income tax were framed as per the laws of income tax act 1961. The act and rules together govern the overall income tax framework in India. The income tax rules specify that the Income Tax can be collected in three modes namely , TDS (tax deduction at source) , Advance tax, Self Assessment tax. The act also specifies the process of income tax filing and various ITR forms required for specific purposes.
The act contains the tax savings investments and the limits permitted on each type of investments. These limits also keep getting revised from time to time.
If you find Income tax rules cumbersome, you must take advice from an Income Tax Consultant or the financial advisor specializing in Income tax.