Income Tax
What Is Income Tax?
Income tax is a tax imposed by the government on the income earned by individuals and entities within a specific jurisdiction. It is one of the primary sources of revenue for governments to fund public services and programs.
Here are some key points to understand about income tax:
- Taxable Income
- Tax Rates and Tax Brackets
- Deductions, Exemptions, and Credits
- Filing and Reporting
- Withholding and Pay-As-You-Earn (PAYE)
- Compliance and Enforcement
Types of taxes
What type of tax is an income tax?
This includes basic salary, taxable allowances, perquisites, and profit in lieu of salary, as well as pension received by the person who himself/herself has retired from the service. Incomes from salary and pension are included in the computation of taxable income.
Income from salary/pension
This includes actual and presumptive incomes from business and professions that individuals do in their personal capacity and is added to taxable income after adjustment of the deductions allowed.
Income from business/profession
An income tax assessee can own one or more house properties. These house properties can be self-occupied or rented out or even vacant. This head describes the rules relating to such ownership. The rules under this head describe how rent from one or more house properties is to be treated for the purpose of calculation of taxable income.
Income from house property
This includes incomes like interest from a savings account, fixed deposits (FDs), family pension etc, which are included in the taxable income.
Income from other sources
Such incomes are included in the total income, but excluded from taxable income as different tax rates are applicable on these types of income.
Income from Lottery, Betting, Race.
Capital gains arise at the time of selling capital assets like gold, house properties, stocks, securities, mutual fund units etc. Depending on the types of capital assets and the period of holding, gains on the sale of such assets are categorised as short-term and long-term capital gains.
Capital Gain
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