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Some one said that Income tax is a tax on income. Sounds simple isn't it? The actual application of the law is however complex and affects everyone in the society. Your Wallet is best watched only when the tax concerns and obligations are also adequately addressed. You have to file a Income Tax return when you fulfil any one of the six conditions. Through these columns, WALLETWATCH would precisely aim at addressing your requirements. The focus in these columns would be YOU, the INDIVIDUAL tax payer though the news and articles could address issues concerning others as well.
Let us get started.
In India the tax paying persons are classified as :
- Individuals
- Firm
- Association of persons or Body of Individuals whether incorporated or not
- Companies and
- Aritificial Juridical persons not covered by any of the above
The Income assessable is computed under specific headings given below:
- Salaries
- Income from House Property
- Profits and gains of business or profession
- Capital gains
- Income from Other Sources
What are the income on which tax has to be paid would depend upon the individual's residential status and the place where the income assessible. There are rules governing residential status and income accruing. The Act also provides for relief from tax in regard to money invested in Tax saving investments and deductions from income such as contribution to charities, medical expenses on dependents, contribution to pension fund etc. The tax rates are progressive i.e., they increase with increasing taxable income.
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