Income Tax in India

What do you mean by Income Tax?

Income Tax is the tax imposed by the Government of India on the body who earns income in India. This tax is levied on the strength of Income tax Act.

Income tax is levied according to Assessment Year which is the twelve-month period i.e. 1st April to 31st March immediately following the previous year.

What is considered as income under income tax?

Income earned by persons from:

  1. Income from Salary: Income obtained by an employee from his/her employer in cash, kind or as a facility is considered as Salary.
  2. Income from House property: Property includes the building and the land surrounding it.
  3. Income from Business or Profession (exploitation of one’s skills and knowledge independently).
  4. Income from capital gains: If you have sold your property at Rs. 10 lakh which you had been purchased by you for Rs. 3 lakhs some year ago then you are required to pay tax on the profit of Rs 7 lakh earned by you and this profit is called as capital gain.
  5. Income from other sources

What is the Procedure for Depositing Tax in India?

You have to fill up the required challan available in the Income Tax department office, banks and on the Income Tax department web site and deposited in the bank along with the money. You could also pay your tax on-line.

Applicable ITR Form for Different Types of Income

ITR1 For Individuals having Income from Salary/ Pension/ family pension & Interest
ITR2 For Individuals and HUFs not having Income from Business or Profession
ITR3 For Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship
ITR4 For individuals & HUFs having income from a proprietary business or profession
ITR5 For firms, AOPs and BOIs
ITR6 For Companies other than companies claiming exemption under section 11
ITR7 For persons and companies required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D)
ITR8 Return for Fringe Benefits
ITRV Where the data of the Return of Income/Fringe Benefits in Form ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6 & ITR-8 transmitted electronically without digital signature

 

Income Tax deduction Options (Tax Saving Options) Available