Income Tax Return filing: General FAQs taxpayers should know
Income Tax Return filing: Income Tax is a tax levied on the income of every person by the Government of India. The provisions governing the Income-tax are covered in the Income-tax Act of 1961.
Income Tax Return filing: Every salaried person whose total income exceeds the basic exemption limit has to mandatorily file the ITR. Citizens find themselves tied between basic questions related to income tax at times, here are a few frequently asked questions.
What is Income Tax?
Income Tax is a tax levied on the income of every person by the Government of India. The provisions governing the Income-tax are covered in the Income-tax Act of 1961.
Who is supposed to pay taxes?
Income tax is to be paid by every 'person'. The term 'person' covers in its ambit natural as well as artificial persons.
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The term 'person' includes Individuals, Hindu Undivided Families (HUFs), Association of Persons (AOPs), Body of individuals (BOIs), firms, LLPs, companies, local authorities and any artificial juridical persons not covered under any of the above. Hence, apart from a natural person (an individual), any sort of artificial entity is also liable to pay income tax.
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What is the administrative framework of Income-tax?
The government's revenue functions are managed by the Ministry of Finance. The Central Board of Direct Taxes (CBDT) is a part of the Department of Revenue in the Ministry of Finance that has been entrusted with the task of administration of direct taxes like income tax, wealth tax, etc.
CBDT deals with essential inputs for policy framing and planning of direct taxes and also administers the direct tax laws through the income tax department. Hence, income tax law is administrated under the control and supervision of the CBDT.
How does the government collect taxes?
The government collects tax are collected by through three means:
a) voluntary payment by taxpayers into various designated banks
b) Taxes deducted at source (TDS) from the income of the receiver
c) Taxes collected at source (TCS)
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What is the period for which a person’s income is taken into account for the purpose of income tax?
Income tax is levied on the annual income of a person. Under the Income-tax law is the period starting from 1st April and ending on 31st March of the next calendar year. The Income-tax law classifies the year as --Previous year or current financial year, and -- Assessment year.
The year in which income is earned is called as the previous year or current financial year and the year in which the income is charged to tax is called as assessment year.
For example, income earned during the period of April 1, 2022 to March 31, 2023, is treated as income of the previous year 2022-23. Income of the previous year 2022-23 will be charged to tax in the next year, i.e., in the assessment year 2023-24.
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What are exempt income and taxable income?
Income that is chargeable to tax is called taxable income. On the other hand, an exempt income that is not charged to tax is exempt income. Income-tax law grants exemption from tax to such income.
(with Income tax official website inputs)
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