Firstly, are you currently supposed to pay Income Duty?
The solution depends on the year. For your income for the year 2011-12 (1st May, 2011 to 31st March, 2012), you must pay duty if
you’re a resident person with a taxable income of more than Rs. 1,80,00
you’re a resident girl with a taxable income in excess of Rs. 1,90,000
you are a resident senior citizen (age 60+) with a taxable revenue greater than Rs. 2,50,00
you are a resident very senior citizen (age 80+) with a taxable income of more than Rs. 5,00,000
Just how much tax am I expected to cover?
You must have heard about’Revenue Duty Slabs ‘. For a resident man, the slabs for the year 2011-12 are
Money Piece – 0 to 1,80,000
Rate – 0%
Revenue Piece – 1,80,001 to 5,00,000
Charge – 10%
Money Slab – 5,00,001 to 8,00,000
Rate – 20%
Revenue Piece – above 8,00,000
Charge – 30%
Which means that if your money is significantly less than 1,80,000 you do not have to pay tax.
If your revenue is, state, Rs. 2,30,000, you’ve to pay for at 10% on the amount by which it exceeds Rs. 1,80,000. In this case your tax liability could be (2,30,000 – 1,80,000) *.10
And if your income is, say, Rs. 6,00,000, you have to cover tax on Rs. 3,20,000 ( 5,00,000 – 1,80,000 ) at 10%, and on Rs. 1,00,000 ( 6,00,000 – 5,00,000 ) at 20%.
So, meaning every year I’ve to attend the Money Duty Division and spend it?
Most likely, no. To produce points easy on your own conclusion, the Division makes your company do the same. Your boss can take it from your own salary and spend it for you. This really is named TDS – Tax Deduced at Source.
What is this Sort 16?
How do you know if your company is spending your tax on time? and what’s the amount?
Your company will give you a Variety 16 at the conclusion of a year. That type 16 has factual statements about the wage he’s paid to you, the duty he has subtracted about it, and compensated to the Revenue Tax Department.
What is Advance Duty / Self-Assessment Tax?
Your company will withhold tax on your own salary income and pay it to the Money Tax Department, but what when you yourself have money from different resources as well?
State, you offered an item of land and made a good profit on it. At this point you have to pay for duty with this profit. Regrettably, your employer will not spend it. efiling income tax will have to do it.
Get still another case. Your boss did not deduct duty on your own salary. He will face penalties from the Income Duty Division, but what about you? You’ll now you have to cover it to the Revenue Tax Team directly. It’s a rare case.
This really is named Advance Duty / Self-Assessment Tax
Can there be any difference between the above two?
If you spend it all through the season, i.e., between 1st May, 2011 and 31st March, 2012 (for 2011-12) it is known as Advance Tax.
If, while planning your duty return, you know that you however have to cover tax, and spend it so, it is named Self-Assessment Tax. Therefore Self-Assessment Tax is paid after 31st March, 2012.
What are income tax deductions?
Deductions are particular duty benefits you might be permitted to avail. If your revenue is Rs. 4,00,000, and you are allowed to deductions of Rs. 1,00,000, you’ll simply spend tax on Rs. 3,00,000 at the piece rates.
There are many deductions. Case:
Premium compensated on a Living Insurance Plan
Housing Loan Repaid
Total settled in a PPF (Public Provident Fund) Bill
Particular Good Funds acquired
Ok, therefore my company gives tax on my behalf. So, my job is performed? I don’t have to do any such thing, correct?
Not really. You have to file an income duty return with the Money Tax Department. A get back is only a form that states the revenue you have acquired throughout every season, the duty you’re supposed to pay on, that tax you actually paid, the huge benefits you availed, etc…