Income tax refers to the tax levied by the government for the purpose of financing its various operations. Taxes are of two types, direct and indirect. Whereas Income Tax is a direct tax, service tax, excise and the latest one to subsume all these taxes Goods and Services Tax (GST) are all indirect taxes.
Apart from funding the activities of the government, taxes also act as a fiscal stabiliser that aid in distributing wealth evenly among the population. Furthermore, taxes are instrumental in cushioning the effects of economic cycles. The payment of Income Tax in India is made according to the provisions made under the Income Tax Act. According to the Indian Income Tax laws, income from the following sources is deemed taxable:
The sum of income from all the sources above is calculated according to the provisions of Income Tax Act. The tax rates in India vary according to the earnings of an individual and are referred to as Income Tax slabs. These Income Tax rates are revised every year during the budget.
Salaried individuals can file their income tax returns basis their Form 16. Most of their income details are mentioned in their Form 16 issued by their employers. Our guide on Form 16 will help you understand all about the importance and filing with the help of Form 16.
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. Read our guide on document checklist that will help you be ready to file taxes.
Indian Income tax laws, tax individuals per different slab rates of income. The basic exemption limit is Rs 2,50,000. Income tax department charges different tax slabs at the rates ranging from 10% up to 30%. Our guide on slab rates will explain these in detail. You can easily estimate your tax liability by using our tax calculator and know how much taxes you owe to the government.
Tax returns are a statement of your earnings from various sources of income that include the tax liability, details of tax paid, and other refunds that are eligible to receive from the government. Our guide on ITR forms will help you choose the correct ITR form for tax filing.
You are eligible for refunds to be claimed from the tax department in case you have paid excess taxes. These can be claimed on filing your tax returns. Once you have claimed a refund, you need to keep checking the status of your refund to make sure that your refunds are credited to your account in time. Our guide on tax refunds will help you understand different statuses of refund and know your refund status.