Firstly, are you unreal to pay Income Tax?
The reply relies on the yr. For your revenue for the yr 2011-12 (1st April, 2011 to 31st March, 2012), you'll have to pay tax if
- you're a resident man with a nonexempt revenue of greater than Rs. 1,80,00
- you're a resident lady with a nonexempt revenue of greater than Rs. 1,90,000
- you're a resident oldster (age 60+) with a nonexempt revenue of greater than Rs. 2,50,00
- you're a resident very oldster (age 80+) with a nonexempt revenue of greater than Rs. 5,00,000
How a great deal tax am I unreal to pay?
You should have detected of 'Income Tax Slabs'. For a resident male, the slabs for the yr 2011-12 are
Income Slab - Zero to 1,80,000
Rate - 0%
Income Slab - 1,80,001 to five,00,000
Rate - 10%
Income Slab - 5,00,001 to eight,00,000
Rate - 20%
Income Slab - above 8,00,000
Rate - 30%
This signifies that in case your revenue is lower than 1,80,000 you do not have to pay tax.
If your revenue is, say, Rs. 2,30,000, it's a must to pay at 10% on the amount by which it exceeds Rs. 1,80,000. In this case your tax legal responsibility could be (2,30,000 - 1,80,000) *.10
And in case your revenue is, say, Rs. 6,00,000, it's a must to pay tax on Rs. 3,20,000 ( 5,00,000 - 1,80,000 ) at 10%, and on Rs. 1,00,000 ( 6,00,000 - 5,00,000 ) at 20%.
So, meaning yearly I've to attend the Income Tax Department and pay it?
Most most likely, no. To make issues easy in your finish, the Department makes your employer do the identical. Your employer will deduct it out of your wage and pay it for you. This is named TDS - Tax Deducted at Source.
What is that this Form 16?
How have you learnt in case your employer is paying your tax on time? and what's the amount?
Your employer offers you a Form 16 on the finish of a yr. This type 16 has particulars in regards to the wage he has paid to you, the tax he has deducted on it, and paid to the Income Tax Department.
What is Advance Tax / Self-Assessment Tax?
Your employer will deduct tax in your wage revenue and pay it to the Income Tax Department, all the same what when you have revenue from different sources as properly?
Say, you bought a chunk of land and made an honest revenue on it. You now should pay tax on this revenue. Unfortunately, your employer will not pay it. You must roll in the hay.
Take one other case. Your employer didn't deduct tax in your wage. He will face penalties from the Income Tax Department, all the same what about you? You will now it's a must to pay it to the Income Tax Department straight. It's a uncommon case.
This is named Advance Tax / Self-Assessment Tax
Is there any distinction between the above two?
Yes.
If you pay it through the yr, i.e., between 1st April, 2011 and 31st March, 2012 (for 2011-12) it's referred to as Advance Tax.
If, whereas acquiring ready your income tax return, you understand that you simply still should pay tax, and pay it so, it's referred to as Self-Assessment Tax. Thus Self-Assessment Tax is paid after 31st March, 2012.
What are revenue tax deductions?
Deductions are sure tax advantages you is maybe allowed to avail. If your revenue is Rs. 4,00,000, and you might be allowed to deductions of Rs. 1,00,000, you'll exclusively should pay tax on Rs. 3,00,000 on the slab charges.
There are quite few deductions. Example:
- Premium paid on a Life Insurance Policy
- Housing Loan Repaid
- Amount deposited in a PPF (Public Provident Fund) Account
- Certain Mutual Funds bought
- ULIPs bought
Ok, so my employer pays tax on my behalf. So, my job is completed? I haven't got to do something, proper?
Not actually. You should file an revenue income tax return with the Income Tax Department. A return is nothing all the same a type that states the revenue you will have attained all year long, the tax you have been unreal to pay on, that tax you really paid, the advantages you availed, and many others...
You can scheme an accountant to assist together with your return, or higher still, roll in the hay your self utilizing a non-public on-line revenue tax efiling portal.
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