Individuals (residents and non-residents) need not pay taxes on income up to Rs 2.5 lakh. Beyond this limit, their income becomes taxable based on slab rates prescribed under the law.
There
are many who find income
tax calculation and filing to be a tough task. However, reading
and learning about it can turn out to be a skill useful for a
lifetime. Knowing this basic skill gives you the confidence to deal
with your income and taxes. Here are a few important tips that are
useful when filing income taxes, especially for first-time taxpayers.
Tips
for first-time taxpayers
Tax
payment period and related terms
Tax
is calculated based on the income earned during the period from April
1 of the current year to March 31 of the following year. This period
is called the financial year (FY) and the year in which the income is
assessed is called the assessment year (AY).
For
example, the income accrued during the financial year 2018-19 is
assessed in the assessment year 2019-20.
Income
tax slabs
Taxpayers
must determine the income tax slab they fall under to determine their
tax liability for a given financial year. The income tax slabs are
designed based on the income range per annum.
Each
category of income per annum will correspond to a certain percentage
of tax. Additionally, a certain percentage of cess will also be
applicable.
Individuals
(residents and non-residents) need not pay taxes on income up to Rs
2.5 lakh. Beyond this limit, their income becomes taxable based on
slab rates prescribed under the law. The basic exemption limit is
increased to Rs 3 lakh for a senior citizen and to Rs 5 lakh for a
super senior citizen.
Form
16
Form
16 is a TDS certificate provided by an employer for salaried
individuals. This form includes all the salary details to be entered
while filing
income tax returns. The latest Form 16 is designed such that it
can be directly used to report all the information to be entered in
new ITR-1 form. It consists of information on the deductions you have
claimed, the salary earned, and exemptions availed.
The
employer should provide Form 16 by 15 June every year. Though, the
due date for providing Form 16 has been extended to 10 July 2019.
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