The income tax is paid annually to the government of India on the income of every individual. The provisions governing the same have been clearly specified in the Income-tax Act, 1961. All the revenue related functions are managed by the Ministry of Finance and they are in charge of the administration of direct taxes such as income tax, wealth tax, etc under a sub-department called Central Board of Direct Taxes (CBDT). CBDT also provides various inputs for policy framing and planning direct taxes with the Income-tax department.
Find out about the common FAQs on Income Tax in India.
Income tax contains various parameters that can be extremely difficult to understand and create a lot of confusion. Here are some of the doubts that people have regarding income tax in India.
What is the income tax calculator?
Income tax calculators are easily available online calculators that can be used to calculate the income tax of an individual after taking into consideration all the parameters. These calculators are frequently updated and make the task of evaluating income tax extremely simple. An individual just needs to provide basic information such as gross salary and different allowances, the calculator then gives the amount to be deposited as tax. For calculating the income tax try the income tax calculator by Scripbox which has incorporated the changes suggested in the Union Budget 2020.
What is the minimum non-taxable income limit in India?
For a taxpayer, the income tax is applicable on an income of up to Rs. 2.5 lac per annum. Additionally, under Section 87A a taxpayer is provided with full rebate till the amount of Rs. 5 lac.
Does everyone have to file for income tax returns?
It is mandatory for every taxpayer to file for an income tax return at the end of the financial year. However, if the net taxable income is less than the minimum tax slab i.e. Rs. 2.5 lac the taxpayer is exempted from the mandatory filing of income tax returns. If an individual wishes to claim a refund for TDS deducted, then filing for return is mandatory.
What are the details required while e-filing income tax?
Firstly, understand very well how much tax needs to deducted for the following year. This can be done efficiently by using income tax calculators. The details necessary for e-filing are as follows:
- Basic details like PAN card, Aadhar card, and permanent address of the taxpayer
- Details of the bank accounts held in the financial year with specifying the account in which return amount (if any) must be credited
- Tax paid proof like tax paid challans and TDS
- Income earned proof like form-16, interest earned on various investments
- Receipts for deductions claimed
How will I get back my excess tax paid?
Once the return is processed, the extra amount is returned back to the account or via check to the taxpayer.
When do I have to pay the income tax?
Generally, the income tax is crystallized after the completion of the following year. But for the purpose of ease and constant flow of revenue to the government, the Income-tax Act allows people to pay the taxes in advance, this concept is called “pay as you earn”. Taxes can also be collected in the previous year in the form of TDS and TCS. If during the time of the final assessment, the total amount is short of what was expected, the delta can be paid as a self-assessment tax.
Is my responsibility over as a taxpayer after depositing the amount?
No, the taxpayer is responsible for ensuring that all the credits are available in tax credit statement and TDS/TCS challans. These should be submitted and return should be filled prior to the prescribed date.
What is extemp income and taxable income?
An extemp income does not tax chargeable i.e. the income tax office has granted exemption from tax to such income. Incomes that are chargeable to tax are known as taxable income.
Eg. Dividend income from an Indian company is granted exemption from tax but the same is not true for foreign companies.
If my income is taxed both in India and foreign, can I claim any relief on the total amount?
Yes, relief can be claimed on an income that is charged for tax in both the countries. Relief is either calculated based on the agreement that our government has on double taxation avoidance with another country or by allowing relief as per Section 91 of the income tax act.
How will I know how much income tax to pay?
The different rates and deductions are available in the Finance Act which is passed every year by the Parliament. Tax liability can also be easily checked by income tax calculators available online free of charge.
What is a tax on regular assessment and how can it be paid?
According to the income tax act, every individual is responsible for calculating the tax correctly and then paying the due amount. This can be done using income tax calculators. If the Department of income tax finds any discrepancy in the due tax amount and actual amount paid, they raise a demand known as the tax on regular assessment. This amount needs to be paid within 30 days of the notice issued.