What is Income Tax?
Income tax is basically a government levy imposed on both earned income and unearned income. Income tax can be classified in 2 categories:
- Personal Income tax
- Corporation Income tax
Personal Income tax, levied on individuals, partnerships, sole-proprietorships
Corporation Income tax, levied on net earnings of incorporated firms.
What is Income Tax Return?
Income Tax Return may be defined as a document providing the tax collector information about the taxpayer’s tax liability. Taxpayers who are earning more than 5 lakhs taxable income is mandatory for E-filing of income tax return. Income tax is basically a percentage of income that is paid to the government. All taxes are levied which is based on the passing of a law and the Income Tax Act, 1961 governs the provisions for our income tax. You can easily file your Income Tax Return within a day. Fill up our application form here Application Form. Register Now!!!
Easily e-file your Income tax Return, TDS Return, AIR Return and Wealth tax return online through Tax Filing
- The year in which income is earned is known as the Previous Year.
- The year in which it is charged to tax is known as Assessment Year.
Taxes may be collected by the government in 3 ways:
- Advance tax and self- assessment tax.
- Taxes Deducted at Source.
- Taxes Collected.
Types of Income
Income from Salaries
Income received from an employer by an employee is taxable and employers provide a Form 16 which includes details of tax deductions and net paid income.
Income from House Property
If the assesse is the owner of a property that’s been given out on rent then income received from house property is taxed. The property should not be used for business or professional purposes.
Profits and Gains of Business or Profession
These taxes are applicable for income from business or professional services rendered.
Income from Capital Gains
These taxes are applicable on income that appears when capital assets are transferred.
Income from Other Sources
- Interest on Government securities, bonds and debentures
Benefits of Income Tax Return
- Filing of income tax return in India is not an uncomplicated task.
- Filing of income tax return of preceding years is also available.
- Filing of Income tax return helps to create a strong financial background.
- Filing of Income tax return saves your money, as non filing of returns attracts a penalty with minimum Rs. 5,000 and interest under section 234A.
- Submitting income tax returns of past three years even if it is a NIL return to banks or financial institutions for smooth processing of Loans like housing, education, vehicle etc.