I have recently started earning some money and will be filing my returns soon. However, this is a new system to me and I want get a grasp on "How Income Tax system works in India?" On first look, It looks a bit complicated to me and the Purpose of this question is to learn from your experiences. To start with, I will appreciate if you can share following info: 1) IT Return: What all you need to know if you are doing it first time and would like to take care of it on your own. 2) Any website/online training to walk through the concepts?
as indian economy was mixed economy it leavy tax on slab base for resident the fallowing slab rate are applied 1. if assessee is below 60 years of age then upto 2,50,000 - 0% 2,50,000 to 5,00,000 - 10% 5,00,000 to 10,00,000 - 20% above 10,00,000 - 30% 2. if assessee is above 60 and below 80 years of age then upto 3,00,000 - 0% 3,00,000 to 5,00,000 - 10% 5,00,000 to 10,00,000 - 20% above 10,00,000 - 30% 3. if assessee is above 80 years of age then up to 5,00,000 - 0% 5,00,000 to 10,00,000 - 20% above 10,00,000 - 30%
There's nothing quite like the excitement and pride of receiving your very first paycheck. You worked hard for a solid month, and here's your much-deserved compensation. But wait a second ... what's the story with this line that says "net pay?" That can't be your actual salary, could it? What happened to all of your money? By the time you get your paycheck, it's been cut up like a pizza, with several government agencies taking a piece of the pie. Exactly how much money is withheld from each check varies from person to person, company to company and state to state. However, almost every income earner has to pay federal income tax. We generally don't think much about taxes except during the annual tax season. It's probably the most dreaded time of the year for millions of Americans, yet we circle it on our calendars, along with holidays and birthdays. But little joy is connected to April 15, the deadline for filing tax forms
Income Tax system in India is fairly straightforward. You have to pay tax ON INCOME over and above a certain limit, that varies according to your personal profile, and the tax is charged in three slabs. I explained the calculation and various terms in another answer here. Omkar Sapre's answer to Income Tax: What is the way to calculate tax payable from taxable income in India? The Indian Tax Laws are very simple and easy to understand. Though India is one among the countries with a high taxation rate, as citizens we also get a lot of options to reduce your tax liability. Most people are unaware of all these options and end up concealing their income to avoid taxes. If they knew all the options to save tax legally, I am pretty sure a big portion of people wont need to resort to illegal ways to reduce their taxes. Taxable Income = Total Income - Deductions - Exemptions First 2.5 lakhs of Taxable Income - Tax = 0 2.5 lakhs to 5 lakhs - 10% 5 lakhs to 10 lakhs - 20% Above 10 lakhs - 30%