Everybody is aware of the word income tax. Each country has a rule of its own in terms of income tax calculations. In the modern times a person can easily calculate his or her income tax through the help of income tax calculator . There are several websites which has the programme of tax calculator. Speaking about India, the tax levels have increased from the year of 1950. During 1971 there were a total of 11 slabs in tax where the maximum tax rate was 93.5 % which included the surcharges. During 1974 the maximum rate was 97.5 %. The tax was then reduced due to the income tax circulars as the tax evasion was increasing. The tax rate was then decreased to 40 % during 1993.
The income of a person when does not exceed a certain level is not liable to tax is an asset. It becomes chargeable under the income tax. The rates are agreed by the income tax circulars and finance acts in a given assessment year and is determined according to a person’s residential status. Thus this tax is the tax which is payable at a rate which is enacted by Union Budget, every year on the basis of total income which is earned by each and every person in the preceding year. The charge is completely based upon the type of income of a person. Be it a capital or be it revenue. The educational cess becomes applicable at the rate of 3 & over the income tax of the person. The surcharge is not applicable.
Residential status also becomes necessary which is clearly stated clearly in the income tax circulars. There are basically 3 status of the residentially. The first one is for the ordinary residents. Under this, the person must reside in India for minimum 182 days in the previous year or must have a stay in India for 365 days in the last 4 years in the previous year. The regular residents are taxable always on their respective income which is earned in India as well as in the abroad. If the income of the non residential Indian is acquired from any kind of trade or business which is headquartered in India they are compelled to give a small amount of tax.
Basically the complete income of a resident is separated into 5 major parts. The first part is the income from the salary; the second can be attributed to the money coming from house property. The third one is the income which is generated from any profession or business of the person, the fourth one is in the form of capital gain and lastly there is the income from various other sources. The income tax circulars gives all the details regarding the rules and regulations and the tax calculator comes into handy which can be used by many to know the exact amount which must be given to the government.
The income of a person when does not exceed a certain level is not liable to tax is an asset. It becomes chargeable under the income tax. The rates are agreed by the income tax circulars and finance acts in a given assessment year and is determined according to a person’s residential status. Thus this tax is the tax which is payable at a rate which is enacted by Union Budget, every year on the basis of total income which is earned by each and every person in the preceding year. The charge is completely based upon the type of income of a person. Be it a capital or be it revenue. The educational cess becomes applicable at the rate of 3 & over the income tax of the person. The surcharge is not applicable.
Residential status also becomes necessary which is clearly stated clearly in the income tax circulars. There are basically 3 status of the residentially. The first one is for the ordinary residents. Under this, the person must reside in India for minimum 182 days in the previous year or must have a stay in India for 365 days in the last 4 years in the previous year. The regular residents are taxable always on their respective income which is earned in India as well as in the abroad. If the income of the non residential Indian is acquired from any kind of trade or business which is headquartered in India they are compelled to give a small amount of tax.
Basically the complete income of a resident is separated into 5 major parts. The first part is the income from the salary; the second can be attributed to the money coming from house property. The third one is the income which is generated from any profession or business of the person, the fourth one is in the form of capital gain and lastly there is the income from various other sources. The income tax circulars gives all the details regarding the rules and regulations and the tax calculator comes into handy which can be used by many to know the exact amount which must be given to the government.
