Money Tax for Novices

Firstly, are you currently expected to pay Income Duty?

The clear answer depends on the year. For the money for the year 2011-12 (1st May, 2011 to 31st March, 2012), you will have to pay tax if

you are a resident man with a taxable revenue of more than Rs. 1,80,00
you’re a resident person with a taxable revenue of more than Rs. 1,90,000
you’re a resident senior (age 60+) with a taxable income of more than Rs. 2,50,00
you are a resident very senior citizen (age 80+) with a taxable revenue in excess of Rs. 5,00,000
Simply how much duty am I supposed to pay for?

You’ll want heard about’Revenue Duty Slabs ‘. For a resident guy, the slabs for the season 2011-12 are

Revenue Piece – 0 to 1,80,000
Charge – 0%

Revenue Piece – 1,80,001 to 5,00,000
Rate – 10%

Revenue Piece – 5,00,001 to 8,00,000
Charge – 20%

Money Piece – over 8,00,000
Charge – 30%

This means that if your money is less than 1,80,000 you do not have to cover tax.

If your money is, claim, Rs. 2,30,000, you’ve to cover at 10% on the total amount where it meets Rs. 1,80,000. In this instance your tax liability will be (2,30,000 – 1,80,000) *.10

And if your money is, claim, Rs. 6,00,000, you’ve to cover duty 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 visit the Revenue Tax Division and spend it?

e-filing , no. To create things simple on your end, the Team makes your employer do the same. Your employer can withhold it from your own salary and spend it for you. This really is called TDS – Duty Subtracted at Source.

What is this Kind 16?

How have you any idea if your boss is spending your duty promptly? and what is the quantity?

Your company will give you a Variety 16 by the end of a year. This form 16 has information regarding the salary he has paid for you, the duty he has subtracted onto it, and compensated to the Income Tax Department.

What is Advance Duty / Self-Assessment Duty?

Your employer can take tax on your wage revenue and pay it to the Revenue Duty Division, but what when you yourself have revenue from other sources as effectively?

Claim, you bought a bit of area and produced a significant income on it. At this point you have to pay tax with this profit. Unfortunately, your boss will not pay it. You must do it.

Take yet another case. Your boss did not deduct tax on your own salary. He will experience penalties from the Income Tax Team, but how about you? You’ll so you have to pay for it to the Money Duty Office directly. It’s a uncommon case.

That is named Improve Duty / Self-Assessment Tax

Can there be any huge difference between the aforementioned two?

Yes.

If you spend it during the entire year, i.e., between 1st April, 2011 and 31st March, 2012 (for 2011-12) it is named Improve Tax.

If, while planning your tax reunite, you realize that you still have to pay for tax, and spend it so, it is named Self-Assessment Tax. Therefore Self-Assessment Duty is paid following 31st March, 2012.

What’re income tax deductions?

Deductions are certain duty advantages you may be allowed to avail. If your money is Rs. 4,00,000, and you’re allowed to deductions of Rs. 1,00,000, you will simply pay tax on Rs. 3,00,000 at the slab rates.

There are many deductions. Example:

Advanced compensated on a Life Insurance Policy
Property Loan Repaid
Total deposited in a PPF (Public Provident Fund) Bill
Specific Common Resources purchased
ULIPs purchased
Ok, so my boss gives tax on my behalf. So, my job is completed? I do not have to do any such thing, right?

Not really. You have to file an revenue tax reunite with the Money Duty Department. A reunite is only an application that claims the money you have gained throughout the year, the duty you’re supposed to pay for on, that duty you really compensated, the advantages you availed, etc…

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