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Income tax is that percentage of your income that you pay to the government to fund infrastructural development, pay the salaries of those employed by the state or central governments, etc. All taxes are levied based on the passing of a law, and the law that governs the provisions for our income tax is the Income Tax Act, 1961.
Income tax is only of the direct means of taxation like capital gains tax, securities transaction tax, etc., and there are many other indirect taxes that we pay like sales tax, VAT, Octroi, service tax, etc.
The income tax you pay every month or upon every contractual earning is what forms a large part of the revenue for the Government of India. These revenue functions are managed by the Ministry of Finance, which has delegated the responsibility to managing direct taxes (like income tax, wealth tax, etc.) to the Central Board of Direct Taxes (CBDT).
Income Tax
Income tax is applicable for individuals, businesses, corporate, and all other establishments that generate income. The Income Tax Act, 1961 regulates the collection, recovery, and administration of income tax in India. The government requires the tax amount for various purposes ranging from building the infrastructure to paying the state and central government’s employees. It helps the government in generating a steady source of income that is used for the development of the nation.
The income tax is paid every month from the monthly earnings, however, it is calculated on an annual basis. The amount of income tax an individual has to pay depends on many factors.
Income Tax Department
Under the Department of Revenue of the Ministry of Finance, the Income Tax Department (IT Department) is responsible for monitoring the collection of Income Tax, Expenditure Tax, and various other Financial Acts that are passed every year in the Union Budget. The Central Board of Direct Taxes (CBDT) regulates the policy and planning of taxes. CBDT is also responsible for administering the direct tax laws through the IT Department. In addition to the collection of taxes, the IT department is also involved in prevention and detection of tax avoidance.
Changes Brought About in Income Tax in the Union Budget of 2018
Finance Minister, Arun Jaitley, in the Union Budget 2018 session yesterday (1 February) proposed five new changes to be incorporated to the existing standards of the Income Tax Department:
- A 1% increase in the cess of corporation and personal income tax was proposed by the Finance Minister in the session yesterday. From an earlier 3%, the cess has now been increased to 4%. This, in turn, will spiral the total income tax paid by a taxpayer, every year.
- Salaried individuals, henceforth, will get a Rs.40,000 deduction on their incomes, thereby replacing the existing exemption permitted on reimbursement of medical costs and transportation allowances. Around 2.5 crore salaried individuals are believed to benefit from this move and the total cost incurred by the Government would amount to Rs.8,000 crore. In the year 2006-07, standard deductions on incomes were abolished, although soon after the concept was brought back into action. Standard deduction, essentially comprises of deduction of a certain amount of money from the salaried individual’s income to cope with expenses that the person would incur during his employment in the organisation.
- The Union Budget 2018 introduced a new 10% tax charged on investments of long-term capital gains in stocks, and equity mutual funds. Contradicting hugely from its existing standard of tax exemption, the new tax law states that all profits exceeding the amount of Rs.1 lakh (from mutual funds and stock markets) will henceforth be taxed a 10% rate. However, long-term capital gains that have been invested in stocks and mutual funds up until January 31, 2018 will be exempted from any tax deduction.
- The Finance Minister in the session of Union Budget 2018 held yesterday also introduced a 10% tax rate on distributed income earned from equity-based mutual funds.
- Concerning the senior citizens of the country, the Indian government has established a lot of changes that will help minimise their financial burden:
- The exemption of interest income on prepayments made in banks and post offices has been increased to Rs.50,000 from an earlier Rs.10,000.
- Under Section 80D, the deduction limit for premiums paid on health insurances or other medical expenditures has been increased to Rs.50,000 from an existing amount of Rs.30,000.
- No deduction of TDS under Section 194A. Availability of benefits for interest received from recurring and fixed deposit schemes.
New Income Tax Changes from April 1 by Income Tax Department
In the Budget of 2017, several changes related to income tax were announced. These changes will come into effect from April 1, 2017. Some of the important changes are as follows:
- The income tax rate for people earning Rs.2,50,000 to Rs.5 lakh per year has come down to 5%, but people earning over Rs.50 lakhs p.a. will have to pay an additional surcharge along with the applicable tax rate. The surcharge is 10% for people earning an income of Rs.50 lakhs to Rs.1 crore and the surcharge is 15% for people earning an income of over Rs.1 crore.
- Filing of ITR will become easy for people earning up to Rs.5 lakhs as the government will introduce a simplified 1 page form for them. People who file their ITR using this form for the first time will not be scrutinized by the Income Tax Department.
- No deductions can be claimed for investments made under the Rajiv Gandhi Equity Saving Scheme from AY (Assessment Year) 2018-2019.
- People will have to pay a penalty of Rs.5,000, if they do not file ITR for the present FY (Financial Year) on time (latest by December 31). If they file after December 31, the fine amount will increase. The fine is capped at Rs.1,000 for people who earn up to Rs.5 lakhs annually.
- According to a report by Economic Times, the holding period for long term immovable property has been reduced to 2 years. It was 3 years before. Also, if such property is held beyond 2 years, it will be taxed at 20% and will be eligible for reinvestment and exemptions.
- In case of long term capital gains tax, the base year for cost indexation has been changed from April 1, 1981 to April 1, 2001. Tax exemption will be available, if people re-invest in some selected redeemable bonds. The exemption will also be available for investments in REC and NHAI bonds.
- From June 1, 2017, people whose rental payments are more than Rs.50,000 per month have to subtract 5% TDS.
- From July 1, 2017, people will not be able to file their ITR without Aadhaar.
- People who make partial withdrawals from NPS (National Pension System) do not have to pay tax on the same. They can withdraw 25% of their own contribution before retiring in case of emergencies.
- Health, Two-wheeler and Car insurance premiums may increase from April 1, 2017.
- People who do not keep a minimum of Rs.5,000 per month in their SBI accounts will have to pay penalty from April 1, 2017.
Apart from these, there are other changes that will be introduced. People are advised to keep themselves updated about these changes as they may have a direct impact on their income tax.
Income Tax – In Detail:
Income tax has to be paid by every individual person, Hindu Undivided Family (HUF), Association of Persons (AOP), Body of Individuals (BOI), corporate firms, companies, local authorities and all other artificial juridical persons that generate income.
Taxes are calculated on the annual income of a person, and an annual cycle (year) in the eyes of the Income Tax law starts on the 1st of April and ends on the 31st of March of the next calendar year. The law recognizes and classifies the year as “Previous Year” and “Assessment Year”.
The year in which income is earned is called the previous year and the year in which it is charged to tax is called the assessment year.
For example: Income earned between April 1st 2014 and March 31st 2015 is called the income of the previous year and will be charged to tax in the next year, or the assessment year that starts on April 1st 2015.
Taxes are collected by the government in three primary ways:
- Voluntary payment by taxpayers into designated banks, like advance tax and self-assessment tax.
- Taxes Deducted at Source (TDS) which is deducted from your monthly salary, before you receive it.
- Taxes Collected (TCS).
Income Tax Slab Rate:
Income tax slab rates are for different categories of taxpayers, who are taxed progressively higher based on their earning. The income tax slab rates can be broadly classified into the following categories:
New Income Tax Slab Rates for FY 2017-18 (AY 2018-19)
Income tax slab for individual tax payers & HUF (less than 60 years old) (both men & women)
| Income Slab | Tax Rate |
|---|---|
| Income up to Rs. 2,50,000* | No Tax |
| Income from Rs. 2,50,000 – Rs. 5,00,000 | 5% |
| Income from Rs. 5,00,000 – 10,00,000 | 20% |
| Income more than Rs. 10,00,000 | 30% |
| Surcharge: 10% of income tax, where total income is between Rs. 50 lakhs and Rs.1 crore. 15% of income tax, where total income exceeds Rs. 1 crore. | |
| Cess: 3% on total of income tax + surcharge. | |
| * Income upto Rs. 2,50,000 is exempt from tax if you are less than 60 years old. | |
Income tax slab for individual tax payers & HUF (60 years old or more but less than 80 years old) (both men & women)
| Income Slab | Tax Rate |
|---|---|
| Income up to Rs. 3,00,000* | No Tax |
| Income from Rs. 3,00,000 – Rs. 5,00,000 | 5% |
| Income from Rs. 5,00,000 – 10,00,000 | 20% |
| Income more than Rs. 10,00,000 | 30% |
| Surcharge: 10% of income tax, where total income is between Rs. 50 lakhs and Rs.1 crore. 15% of income tax, where total income exceeds Rs.1 crore. | |
| Cess: 3% on total of income tax + surcharge. | |
| * Income up to Rs. 3,00,000 is exempt from tax if you are more than 60 years but less than 80 years of age. | |
Income tax slab for super senior citizens (80 years old or more) (both men & women)
| Income Slab | Tax Rate |
|---|---|
| Income up to Rs. 2,50,000* | No Tax |
| Income up to Rs. 5,00,000* | No Tax |
| Income from Rs. 5,00,000 – 10,00,000 | 20% |
| Income more than Rs. 10,00,000 | 30% |
| Surcharge: 10% of income tax, where total income is between Rs. 50 lakhs and Rs.1 crore. 15% of income tax, where total income exceeds Rs.1 crore. | |
| Cess: 3% on total of income tax + surcharge. | |
| *Income up to Rs. 5,00,000 is exempt from tax if you are more than 80 years old. | |
- Income Tax Slab for Individuals and Hindu Undivided Families:
These are the slab rates for FY 2016-17 (AY 2017-18) These income tax slab rates are also applicable for : FY 2015-16 (AY 2016-17) FY 2014-15 (AY 2015-16)
On all the tables listed below, Education Cess of 2% and SHEC of 1% will be levied on the tax computed using the rates given below.
Under Section 87(A), an Income Tax Rebate of Rs.2,000 is provided for all individuals earning an income that’s less than Rs.5,00,000 per annum.
- Tax applicable for individuals below 60 years
| Annual Income | Tax Rates | Education Cess | Secondary and Higher Education Cess |
|---|---|---|---|
| Up to Rs.2,50,000 | Nil | Nil | Nil |
| Rs.2,50,001-Rs.5,00,000 | 5% | 2% of income tax | 1% of income tax |
| Rs.5,00,001-Rs.10,00,000 | Rs.12,500 + 20% | 2% of income tax | 1% of income tax |
| Above Rs.10,00,000 | Rs.1,12,500 + 30% | 2% of income tax | 1% of income tax |
- Tax applicable for individuals over 60 years and under 80 years
| Annual Income | Tax Rates | Education Cess | Secondary and Higher Education Cess |
|---|---|---|---|
| Up to Rs.3,00,000 | Nil | Nil | Nil |
| Rs.3,00,001-Rs.5,00,000 | 5% | 2% of income tax | 1% of income tax |
| Rs.5,00,001-Rs.10,00,000 | Rs.10,00 + 20% | 2% of income tax | 1% of income tax |
| Above Rs.10,00,000 | Rs.1,10,000 + 30% | 2% of income tax | 1% of income tax |
- Tax applicable for individuals over 80 years and above
| Annual Income | Tax Rates | Education Cess | Secondary and Higher Education Cess |
|---|---|---|---|
| Up to Rs.5,00,000 | Nil | Nil | Nil |
| Rs.5,00,001-Rs.10,00,000 | 20% | 2% of income tax | 1% of income tax |
| Above Rs.10,00,000 Rs.1,12,500 | Rs.1,00,000 + 30% | 2% of income tax | 1% of income tax |
Income Tax should be deducted at applicable rates as above along with surcharge and Education Cess. The individuals who are earning over Rs.50 lakh and under Rs.1 crore will be required to pay a surcharge of 10% tax on the total income and the individuals who are earning over Rs.1 crore, a surcharge of 15% will be applicable as the income tax.
- Businesses:
The following tables indicate the tax slabs for businesses.
- Income Tax Slab for Co-operative societies :
| Income Tax Slab | Tax Rates |
|---|---|
| Total income less than Rs.10,000. | 10% of the income. |
| Total income greater than Rs.10,000 but less than Rs.20,000. | 20% of the amount by which it exceeds Rs.10,000. |
| Total income greater than Rs.20,000. | 30% of the amount by which it exceeds Rs.20,000. |
- Firms, Local Authorities, Corporates and Domestic Companies:
- Income tax slab rates do not apply for these, as they are taxed at a flat rate of 30% on the total income declared.
- A surcharge of 5% is levied on the total income tax of domestic companies if their income exceeds Rs.1 crore. This surcharge does not apply to firms and local authorities.
Income Tax Refund
The government provides an option to save on tax amount by making certain kind of investments. These kinds of investments can be declared for tax exemption under Section 80C and 80D. The Section 80C allows an individual to reduce up to Rs.1,50,000 as investment amount that can be claimed from the annual income. The Section 80D deals with the tax deduction on medical insurance for up to Rs.25,000 for a financial year.
There are many instances when an individual declares more tax amount at the beginning of a financial year than the actual chargeable tax amount. This could be due to investment decision made at a later or mid-year stage or due to investments which provide tax exemption that you have not declared.
An individual can claim for the tax refund by filing the Form 16. Components such as HRA (House Rent Allowance), life insurance premium amount, investments in mutual funds, equity, fixed deposit, tuition fee etc, are included in Form 16 to be declared as investments.
Online Income Tax Refund Status
An individual can visit the website – https://incometaxindiaefiling.gov.in/ to check the status of income tax refund for a particular financial year. Alternately, an email is sent by the IT department with the details of the refund as well. The individual can also call the CPC Bangalore on 1800-4250-0025 (toll-free) number to check for the status of the income tax refund.
Tax Due Dates for the Month of May
| May | 7th May, 2017 –
The due date for deposit of Tax collected/deducted for the month of April, 2017. All sum collected/deducted by an office of the government shall be paid to the Central Government on the same day of transaction where tax is paid without producing an Income-tax Challan. 15th May, 2017 –
30th May, 2017–
31st May, 2017 – The quarterly statement of TDS deposited for the quarter ending March 31, 2017.
|
Income Tax Return (ITR):
If an individual need to claim for income tax refund, he/she will need to fill up the required Income Tax Return (ITR) form. Depending on the income assessment group, the individual will need to submit one of the ITR forms listed below:
| ITR Form Name | Description |
|---|---|
| ITR-1 | For Individuals having Income from Salaries, One house property, Other sources (Interest etc.) |
| ITR-2 | For Individuals and HUFs not having Income from Business or Profession |
| ITR-2A | For Individuals and HUFs not having Income from Business or Profession and Capital Gains and who do not hold foreign assets |
| ITR-3 | For Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship |
| ITR-4 | For individuals and HUFs having income from a proprietary business or profession |
| ITR-4S | Presumptive business income tax return |
| ITR-5 | For persons other than,- (i) individual, (ii) HUF, (iii) company and (iv) person filing Form ITR-7 |
| ITR-6 | For Companies other than companies claiming exemption under section 11 |
| ITR-7 | For persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4E) or 139(4F) |
| ITR-V | The acknowledgment form of filing a return of income |
In order to file the ITR, an individual will require producing the bank statement, Form 16, and a copy of previous years’ return. The individual will need to visit the Income Tax Department’s website – https://incometaxindiaefiling.gov.in/ to register and file the returns.
Save Income Tax
Declaring investments – From HRA, Life Insurance Premiums, National Savings Certificate, Leave Travel Allowance to Fixed Deposit (minimum of 5 years), ELSS Tax Saving Mutual Funds, and more, by ensuring that you have declared all your investments, you can achieve more deductions on tax. The following options can be considering for saving on income tax:
- Investment options
- Mutual funds such as Equity Linked Savings Schemes (ELSS) can be claimed for tax deduction under Section 80C. Compare to fixed deposits and PPF’s, the ELSS offers shorter lock-in period and more benefits when it comes to making money.
- Unit Linked Insurance Plans (ULIP) are insurance schemes that are linked to the market. The investment made under ULIP qualifies for tax deductions.
- Insurance
- Life insurance and health insurance – The money paid towards life insurance and health insurance policies are considering for tax deductions under Section 80C
- Loans
- When we take a loan for buying a house or for renovation purpose, we are eligible for tax deductions up to Rs.1,50,000 for a financial year.
You can also consider the following options for reducing tax amount on your income:
- Fixed Deposits (FD) – An FD with a lock-in period of five years can help you save on tax while earning the interest on the deposited amount.
- National Saving Certificate (NSC) – The NSC offers a safe and reliable method of investing money. You can deposit as low as Rs.100 for a 5-10 year lock-in period. The investments made under NSC are eligible for tax deductions.
- Provident Fund (PF) – You can also choose to invest more amount towards your PF account that will help you reduce your taxable amount.
Calculate Income Tax
The income tax can be calculated by adding total income from salary, property, capital gains, and income from all other sources, and then, by reducing the deductions that can be declared as investments. Once you have taken out the deductions as your investments, you can clearly see the amount of tax you are liable to pay.
Income Tax Forms
The most frequently used Income Tax Forms are:
| Form | Description |
|---|---|
| Form No. : 3CA | Audit report under section 44AB of the Income-tax Act, 1961 in a case where the accounts of the business or profession of a person have been audited under any other law |
| Form No. : 3CB | Audit report under section 44AB of the Income-tax Act, 1961, in the case of a person referred to in clause (b) of sub-rule (1) of rule 6G |
| Form No. : 3CD | Statement of particulars required to be furnished under section 44AB of the Income-tax Act, 1961 |
| Form No. : 3CEB | Report from an accountant to be furnished under section 92E relating to international transaction(s) |
| Form No. : 10A | Application for registration of charitable or religious trust or institution under section 12A(1)(aa) of the Income-tax Act, 1961 |
| Form No. : 10B | Audit report under section 12A(b) of the Income-tax Act, 1961, in the case of charitable or religious trusts or institutions |
| Form No. : 15CA | Information to be furnished for payments, chargeable to tax, to a non-resident not being a company, or to a foreign company |
| Form No. : 15CB | Certificate of an accountant |
| Form No. : 15G | Declaration under sub-sections (1) and (1A) of section 197A of the Income-tax Act, 1961, to be made by an individual or a person (not being a company or a firm) claiming certain receipts without deduction of tax |
| Form No. : 15H | Declaration under sub-section (1C) of section 197A of the Income-tax Act, 1961, to be made by an individual who is of the age of sixty years or more claiming certain receipts without deduction of tax |
| Form No. : 16 | Certificate under section 203 of the Income-tax Act, 1961 for tax deducted at source from income chargeable under the head “Salaries” |
| Form No. : 16A | Certificate under section 203 of the Income-tax Act, 1961 for tax deducted at source |
| Form No. : 26AS | Annual Tax Statement under section 203AA |
| Form No. : 35 | Appeal to the Commissioner of Income-tax (Appeals) |
| Form No. : 36 | Form of appeal to the Appellate Tribunal |
| Form No. : 49A | Application for allotment of Permanent Account Number under section 139A of the Income-tax Act, 1961 |
| Form No. : 49AA | Application for Allotment of Permanent Account Number [Individuals not being a Citizen of India/Entities incorporated outside India/ Unincorporated entities formed outside India] |
| Form No. : 49B | Form of application for allotment of Tax Deduction and Collection Account Number under section 203A of the Income-tax Act, 1961 |
| Form No. : 60 | Form of declaration to be filed by a person who does not have a permanent account number and who enters into any transaction specified in rule 114B |
Income Types or Taxable Heads of Income:
Income from different sources is taxed differently. These sources are called heads of income and are as follows:
- Income From Salaries:
- All income received from an employer by an employee is taxed under this heading. Employers are bound to withhold tax compulsorily under Section 192 if the income of their employees falls under a taxable bracket. Employers must also provide a Form 16, which contains details of tax deductions and net paid income.
- Income from House Property:
- Income here is taxable if the assesse is the owner of a property that’s been given out on rent. The property should not be used for business or professional purposes. Individuals and HUFs can claim one property as “self-occupied”, which means you and your family live there, and do not have to pay taxes on this. Income from house property is calculated as under:
- Gross Annual Value (GAV) = x
- Less: Municipal Taxes Paid = (y)
- Net Annual Value = x-y
- Less: Deductions under Section 24 = z
- Income from House Property = (x-y) – z
- Profits and Gains Of Business or Profession:
- These are the taxes that will be applicable for income from business or professional services rendered. The provisions for computing the tax on this type of income is in accordance with Sections 30 to 43D.
- Income from Capital Gains:
- This is for the taxes applicable on income that arises when capital assets are transferred. Capital assets are property of any value that’s held by the assesse like land, buildings, equity shares, bonds, debentures, jewellery, art, assets, etc.
- Income from Other Sources:
- Basically, any source of income that cannot be classified under the above heads of income falls under this heading. There are also some specific and pre-determined incomes which fall under this heading, like:
- Income by way of dividends.
- Winnings from horse races / lotteries.
- Employee’s contribution towards staff welfare schemes, any fund set up under the ESIC Act that’s received by the employer from the employees.
- Interest on securities like debentures, government securities and bonds.
- Gifts.
- Interest on compensation.
- Rental income other than house property.
- Family pension received after the death of the pensioner.
- Interest income that is earned other than by way of securities.
Income Tax E-Filing:
You can e-file your Income Tax Return, TDS return, AIR return and Wealth Tax Return online through this link https://incometaxindiaefiling.gov.in/. E-filing your return has obvious advantages like the fact that you won’t have to deal with the hassle of paperwork and waste time sorting through it all. You can simply log on to the secure website and e-file your return.
This government website also has provisions for you to submit returns, view forms 26AS, outstanding tax demand, CPC refund status, rectification status, ITR – V receipt status, online application tools for PAN and TAN, e-pay your tax and even has a tax calculator.
Deductions:
Deductions for your taxable amount are available under various sections of the Income Tax Act , 1961
Section 80C:
Deductions under this section are only available to individuals and HUF. This section allows for certain investments like NSC, etc. and expenditures to be exempt from taxation up to the amount of Rs. 1,50,000.
Section 80CCC:
Deductions under this section are on payments made to LIC or any other approved insurance company under an approved pension plan. The pension policy must be up to Rs.1,50,000 and be taken for the individual himself out of the taxable income.
Section 80CCD:
Deductions under this section are for contributions to the New Pension Scheme by the assesse and the employer. The deduction is equal to the contribution, not exceeding 10% of his salary.
The total deduction available under Section 80C , 80CCC and 80CCD is Rs.1,50,000. However, contributions to the Notified Pension Scheme under Section 80CCD are not considered in the Rs.1,50,000 limit.
Section 80D:
This is the section that deals with income tax deductions on health insurance premiums paid. In the case of individuals, the insurance policy can be taken to cover himself, spouse, dependent children – for up to Rs.15,000 and parents (whether dependent or not) – for up to Rs.15,000. An additional deduction of Rs.5,000 is applicable if the insured is a senior citizen. In the case of HUF, any member can be insured and the general deduction will be for up to Rs.15,000 and an additional deduction of Rs.5,000.
A total of Rs.2,00,000 can be claimed as deductions whether the assesse is an individual or a HUF.
Section 80DDB:
This section is for deductions on medical expenses that arise for treatment of a disease or ailment as specified in the rules (11DD) for the assesse, a family member or any member of a HUF.
Section 80E:
This section deals with the deductions that are applicable on the interest paid on education loans for an education in India.
Section 80EE:
This section deals with tax savings applicable to first time home-owners. Applies for individuals whose first home purchased has a value less than Rs.40 lakh and the loan taken for which is Rs.25 lakh or less.
Section 80RRB:
Deductions with respect to income by way of royalties or patents can be claimed under this section. Income tax can be saved on an amount up to Rs.3,00,000 for patents registered under the Patents Act, 1970.
Section 80TTA:
This section deals with the tax savings that are applicable on interest earned in savings bank accounts, post office or co-operative societies. Individuals and HUFs can claim a deduction on an interest income of up to Rs.10,000.
Section 80U:
This section deals with the flat deduction on income tax that applies to disabled people, when they produce their disability certificate. Up to Rs.1,00,000 can be non-taxed, depending on the severity of the disability.
Section 24:
This section deals with the interest paid on housing loans that is exempt from taxation. An amount of up to Rs.2,00,000 can be claimed as deductions per year, and is in addition to the deductions under Sections 80C, 80CCF and 80D. This is only for self occupied properties. Properties that have been rented out, 30% of rent received and municipal taxes paid are eligible for tax exemption.
TDS:
TDS or Taxes Deducted at Source – is a system incorporated by the Income Tax Law to deduct taxes before the income has been disbursed to the person earning it. It is charged depending on your income tax slab, at its point of origin. You do not get a full amount from which to deduct an income tax amount and pay it back, but get charged even before you’ve earned your income.
The income tax here is deducted by the payer and remitted to the government on your behalf.
TDS on income will not apply if your net taxable income is below Rs.2,50,000 for individuals, Rs.3,00,000 for senior citizens and Rs.5,00,000 for super senior citizens.
It’s important to know which tax bracket one falls under and the investments that can be made to exempt a portion of the income from taxation. A lot of money can be saved through investments, and this helps the flow of funds through investible channels in the economy, thus helping the country develop. Health insurance policies, investments and other deductions can be used to your benefit, if you balance them out well.
Making relevant investments can help save a lot on tax, and earn a lot in eventual interest income. Most tax-saving investments have lock-in periods where the funds cannot be accessed, and in this time compound interest at a rate higher than most savings bank accounts.
Articles to Help You File Income Tax
Income tax can seem like a tedious job for most people, and it has everything to do with the fact that there are a lot of details and nitty-gritties involved in calculating and paying income tax. But, if you want to get a clear picture that is simplistic and easily comprehensible about filing taxes and on the related subjects, read the pages given below.
Source by:- bankbazaar
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