Do you have less knowledge of Income Tax? Then these full guide will help you to become proficient on Income tax concept and other related terms.

What do we mean by Income Tax?

Tax means the money paid to the government other than for transaction-specific goods and services. Thus it is the direct tax that the government imposes on the income of its citizens. The Act, 1961, strict that the central government will collect the tax. The government changes the income slabs and tax rates annually in its Union Budget. Income does not only mean money earned in the form of salary or a form of wages. 

 It may include income related to house property, land property, tours and travels, profits from business, gains from profession (such as bonus), capital gains income, and ‘income from other sources’. The government also often provides certain flexibility such as various deductions are made from an individual’s income before the tax to be imposed is calculated C# Programming Assignment Help. 

It is a form of imposing tax on individuals, Body of Individuals (BOI), Association of Persons (AOP), Hindu Undivided Family (HUF), and businesses need to pay to the central govt. The govt confiscate the tax on your income during an annual year and utilize the amount for the development of the country in the infrastructure. The tax amount depends on your income and the tax slabs.

The income tax flagstone is a substantial part under which the government groups people’s income. The amount of payable tax depends on your income during a financial year ending. There are currently two categories of tax slabs—the old mode of rule and the new management.

The table gives the information of the tax slabs for people below the age of 60 under the old mode of rule:

Moreover, since Budget 2020, you may choose to pay taxes under a new regime. Although the tax rates under the new regime are lower, you can enjoy the advantage only if you do not use the tax exemptions and deductions. 

Now, time for some good news. You already know that the government allows tax deductions and exemptions. These tax benefits lower your taxable income, which leads to reduced tax. 

Exemptions
Exemptions are available for salaried individuals. If you check the pay slip closely, it has different section like basic pay, travel allowance, House Rent Allowance (HRA), DA, and others. Some of these incomes are exempted from taxation. 

Deductions

Deductions are calculated on your total income during a financial year. It includes all your investments and salary. To begin with, salaried people get a standard deduction of ₹5lac on their salary. Furthermore, the IT Act, 1961 has various sections under which the government allows other deductions. Some examples are as follows:

• Section 80D: It allows a yearly tax deduction of up to ₹25,000 on the premium paid towards health insurance policies. If you buy the Medical claim for your parents, you will get an additional deduction of up to ₹25,000.
• Section 80E: It allows a tax deduction on the interest paid for the repayment of an educational loan.
• Section 80G: It allows a tax deduction on the amount paid as a donation to specific charitable organizations and relief funds.
• Section 80C: It allows a yearly tax deduction of up to ₹1.5 lakhs for investments made in National Saving Certificate (NSC), Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), Unit-Linked Insurance Plans (ULIPs), life insurance, Employee Provident Fund (EPF), principal payment towards home loan, Equity-Linked Savings Scheme (ELSS), Senior Citizen Savings Scheme (SCSS), and much more.

Summary: 

after reading the details of Income tax, we hope that some concept have cleared. If there are any more doubt, you can contact us by our website Programming help.