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Indian Income Tax

March 26, 2018

Indian Income tax is a part of your income that you have to pay regularly to the government. You pay income tax every month on your earnings.

You pay income tax on all your earnings, not just your salary. Income tax is a part of your income that you have to pay regularly to the government.

Everyone who earns or gets an income is subject to Indian  Income Tax in India. This applies for a resident or a non-resident of India as well.

Income could be from the salary that you earn or pension that you acquire after retirement.

As per the Income Tax Department breaks down income into five heads:

Income From

1.Salary

It is treated under this head of income as per the Income-tax department.

2.Other Sources

Income from savings bank account interest, fixed deposits.

3.House Property

This is income from property rent that you receive.

4.Capital Gains

Income from sale of a capital asset such as mutual funds and shares.

5.Business Profession

This type of income is when you are self-employed or when you run your business. Apart from business owners, CAs, lawyers, and doctors who have their own practice also come under this category.

Income tax filing for salaried individuals

Salaried individuals can file their income tax returns basis their Form 16. Most of their income details are mentioned in Form 16 issued by their employers.

Documents required for tax filing

There are different documents required for tax filing that need to be kept ready before you file your taxes. These include Form 16, Form 16A, investment receipts, and proofs.

Meaning of Income Tax Slabs

Incomes are grouped according to Income and age. Each Tax Slab has a different tax rate.

Tax Slabs
Normal Citizen (Male & Female) – Age less than 60yrs
Taxable income Tax Rate
Up to Rs. 2,50,000 Nil
Rs. 2,50,000 to Rs. 5,00,000 5%
Rs. 5,00,000 to Rs. 10,00,000 20%
Above Rs. 10,00,000 30%
Senior Citizens (Male & Female) who are of 60 years or more and under 80 years
Taxable income Tax Rate
Up to Rs. 3,00,000 Nil
Rs. 3,00,000 - Rs. 5,00,000 5%
Rs. 5,00,000 - Rs. 10,00,000 20%
Above Rs. 10,00,000 30%
Very Senior Citizens (Male & Female)

.

Taxable income Tax Rate
Up to Rs. 5,00,000 Nil
Rs. 5,00,000 - Rs. 10,00,000 20%
Above Rs. 10,00,000 30%
When do Employees need to submit the tax saving proof to the Employer?

Usually, most Companies collect the tax saving proofs from their employees by January 15th and while processing the salary from January to March the tax will be recalculated as per this actual proof submitted.

The deadline for filing Individual Income tax returns is 31st of July every year.

Exceptions to the Tax Slab
Type of capital asset Holding Period Tax Rate
House Property · Holding more than 24 months

· Holding less than 24 months

 

· 20%

· Depends on slab rate

 

Debt mutual funds · Holding more than 36 months

· Holding less than 36 months

 

· 20%

· Depends on slab rate

Equity mutual funds · Holding more than 12 months

· Holding less than 12 months

 

· Exempt

· 15%

 

Shares · Holding more than 12 months

· Holding less than 12 months

· Exempt

· 15%

 

FMPs · Holding more than 36 months

· Holding less than 36 months

 

· 20%

· Depends on slab rate

 

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