What Is Income Tax?

The term Income tax refers to a kind of tax that governments impose on income generated by businesses and individuals within their jurisdiction. By law, taxpayers must file a tax return annually to work out their tax obligations.

Income taxes are a source of revenue for governments. They're wont to fund public services, pay government obligations, and supply goods for citizens.

Who are accountable to pay income tax?

Individuals under the age of 60 who earn upto Rs. 2.5 lakh per annum and are under the age of 60 are subject to tax in India. The IT department divides the revenue into five distinct divisions or heads.

Any person earning quite the exempted threshold in any of the subsequent five heads must pay tax thereto.

Salaried people and retirees enjoy a uniform source of income.

Interest paid on savings accounts, fixed deposits, and other sorts of investments.

Money earned from rent and money earned from selling the property is that the two main sources of income.

Profits from the selling of capital assets like mutual funds, stocks, and other securities.

Freelancing, contracting, operating as an insurance broke , CA, physicians, attorneys, tuition, and business are all sources of income

The Government of India levies IT on certain bodies, which are the subsequent –

  • Body of people.
  • Corporate firms.
  • Association of persons.
  • Hindu Undivided Family (HUF).
  • Corporations.
  • Any artificial juridical person.
  • Under the Indian government's IT rules, each of the subsequent organizations is subject to direct taxation. The income bracket varies consistent with the shape of organization or cooperative entity.
Income Tax Slab For AY 2021-22 in case of Individual and HUF as per new regime
Income Tax Slab For AY 2021-22 in case of Individual and HUF as per new regime Income Tax Rate for All individuals and HUF- New Scheme
upto Rs. 2,50,000 NIL- No Tax
Rs. 2,50,001 to Rs. 5,00,000 5 % (Tax Rebate u/s 87a is available)
Rs. 5,00,001 to Rs. 7,50,0000 10%
Rs. 7,50,001 to Rs. 10,00,000 15%
Rs. 10,00,001 to Rs. 12,50,000 20%
Rs. 12,50,001 to Rs. 15,00,000 25%
Above Rs. 15,00,000 30%

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