Income Tax 2021
- What is Income Tax ?
- why it is levied?
- What kind of exemption is there on how much income tax?
- What are the latest rates of income tax2021?
- how it is calculated?
Income tax information and what kind of income is taxed and what kind of income is exempt from tax. All this will be understood in detail.
Income Tax
Income tax governments impose on income earned by businesses and individuals falling under their jurisdiction. As per the law, taxpayers have to file income tax returns annually to discharge their tax obligations. Income tax is a source of revenue for governments.
They are used to finance public services, pay government obligations and provide facilities for citizens.
progressive income tax system
Most countries use the progressive income tax system in which those earning higher income pay a higher tax rate than those earning their lower income. Due to various kinds of exemptions and deductions, most of the people do not Income Tax.
Types of Tax
The government mainly collects two methods of tax, direct tax and indirect tax. Income Tax and corporate tax is called direct tax as it is collected directly from the taxpayer.
The direct tax is collected by someone else and pays to the government such as goods and service tax i.e. GST which are collected by shopkeepers, cinema halls, restaurants and other goods vendors and service providers and deposited with the government.
Types of Income Tax
Types of Income Tax in detail , mainly, all income for income tax is divided into the following.
👉Income from salary and pension.
👉Income from other sources such as savings bank account interest, interest on fixed deposits, income from winning lottery etc.
👉Income received in the form of house property income such as rent.
👉Income from capital gains such as mutual funds, shares, income from the sale of house property.
👉Income from business and profession i.e. when you employ yourself, work as a freelancer or contractor, or you run a business. Life insurance agents, chartered accountants, doctors and lawyers fall under this category.
👉Agricultural income has been excluded from the purview of income tax.
Categories and Slabs of Income Tax
👉Tax payers in India are divided into individual taxpayers, Hindu undivided families (HUF), firms and companies. There are different categories and slabs of tax for all this. Income Tax Salab for the financial year i.e.
- Income Tax Rates for under sixty years of age
- Income Tax Slab Income Tax Rates
- Income less than Rs. 2,50,000 zero
- Total income is more than Rs. 2,0,000 but less than Rs. 5,00,000 is 5% of the income above Rs. 2,50,000
- Total income is more than Rs. 5,00,000 but less than Rs. 10,00,000 is 20% of the income above Rs. 5,00,000
- Total income is more than Rs. 10,00,000 plus Rs. 10,00,000 and 30 %
There are various types of deductions available under Section 80 of the Income Tax Act which can be deducted from the total income. This includes interest on home loans, life insurance premium, healthy insurance premium and many other tax savings schemes.
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