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What Income Tax is all about?? Take a look…

04-Jan-2017 10:21:24
What Income Tax is all about?? Take a look…

An income tax is a tax that government imposes on financial income generated by all entities within their jurisdiction. By the law, businesses and individuals must file an income tax return every year to determine whether they owe any taxes or are eligible for a tax refund. Income tax is a key source of funds that the government uses to fund its activities and serve the public.

1. Detailed information of Income Tax is available on www.incometaxindia.gov.in

2. As per Income Tax Act, Income is taxable under five heads- Salary, House Property, Business or Profession, Capital Gain and Other Sources.

3. Salaried person must obtain Form 16 from his Employer Every Year.

4. Income Tax Return should be filed by considering Form 16 and other Income.

5. Transport Allowance is exempt up to Rs.1,600/- per month.

6. 30% Standard deduction is available on Income from House Property.

7. Income to be considered as deemed let out on second House property.

8. For self-occupied house property, deduction of Interest on Housing Loan is allowed up to Rs. 200,000/- and for other house property actual expenditure of Interest on Housing Loan is allowed.

9. Repayment of Principal amount of Housing Loan is deductible u/s 80C up to Rs.150,000/-.

10. Tax Audit is compulsory if sales turnover exceeds Rs.1 crore in case of business.

11. Tax Audit is compulsory if the Gross Receipts of Professionals exceeds Rs.25 lakhs.

12. If sales turnover is below Rs. 1 crore, then net profit of 8% or higher is to be taken as business income otherwise tax audit is required.

13. The Due Date for Tax Audit and income Tax Return is 30th September.

14. Assessee other than Company and those eligible for Tax Audit are required to file Income Tax Return before 31st of July. Extended date is 31st Aug for F.Y. 2014-15.

15. Accurate Stock Valuation should be done on 31st of March.

16. Cash payment should not be made to a person in single day exceeding Rs.20,000/-.

17. Cash Payment limit for Transporters is Rs.35,000/-.

18. Loans, deposits and Immovable Properties transactions should
not be carried out above Rs.20,000/- in cash.

19. Business loss can be carried forward to Next 8 Years.

20.  Tax Audit applicable assesses should deduct TDS on particular transactions.

21. TDS should be made on the date of Credit or Payment basis of whichever is earlier.

22. TDS payment should be made on or before 7th day of Next Month.

23. TDS Returns are to be filed Quarterly.

24. TDS returns can be revised any number of times.

25. TDS should be deducted and paid if applicable.

26. If TDS is not deducted then deduction of 30% of Expenditure
is not allowed.

27. Late filling of TDS return attracts late filing fees of Rs.200/- per day.

28. Long Term Capital Gain will arise if transfer of specified Capital Assets is made after 3 years.

29. Generally Long Term Capital Gains is taxable @ 20%

30. STT paid Long Term Capital Gain on Shares,etc is exempt from Tax.

31. Short Term Capital Gain is Taxable @ 15% if STT is paid.

32. Capital Gain on Immovable Properties is chargeable at Stamp
Duty Value or Selling Price whichever is higher.

33. Dividend received from domestic company is exempt from Tax.

34. Agricultural Income is exempt from Tax.

35. Gifts received form stranger of an Amount exceeding Rs.50,000/- is taxable.

36. Income Tax is not chargeable on Gifts received at the time of Marriage, Will, and in case of Succession and from specified relatives.

37. Maximum deduction limit u/s 80C, 80CCC and 80 CCD is Rs.1,50,000/-.

38. Deduction of Medical Insurance Premium is available up to Rs. 25,000/-.

39. Deduction of Medical Insurance Premium paid for Parents is available up to Rs. 20,000/-.

40. Deduction limit of Interest earned on Saving Accnt is up to Rs.10, 000/-.

41. Income earned by a Minor child is clubbed in the hands of Parents.

42.  Every Taxpayer should verify his Form 26AS.

43. Form 26AS provides the Information regarding the TDS, Advance Tax paid and details of refund.

44. Notice may be sent to the Taxpayer if the Income mentioned in Form 26AS and the Income Tax Return filed is having difference.

45. Basic Exemption Limit for individuals for FY2015-16 is Rs.2,50,000/-.

46. Basic Exemption Limit for Senior Citizen i.e. above 60 years age is Rs.3,00,000/-.

47. Basic Exemption Limit for Super Senior Citizen i.e. above 80 years age is Rs.5,00,000/-.

48. Advance Tax is to be paid if Tax Liability during the year exceeds Rs. 10,000/-.

49. 12% of Surcharge is applicable if Income Exceeds Rs. 1Crore.

50. Income Tax Return should be filed if Income exceeds Basic Exemption Limit.

51. 30% of Tax applicable on Income of Partnership Firm, Company, LLP etc.

52. For Companies – Minimum Alternate Tax and for other Assesses
– Alternate Minimum Tax rate is 18.5%.

53. Details of all Bank Accounts have to be given in Income Tax return.

54. Passport number is required to be given in Income Tax return.

55. Detail of Fixed Assets held in Foreign Country is required to be given in Income Tax return.

56. If taxable income of Individual is less than Rs. 5 Lakhs then relief of Rs.2,000/- is available in Tax.

57. Aadhar Card No. is required to be mentioned in Income Tax return.

58. E-filling of return is compulsory if income exceeds Rs. 5 lakhs.

59. In Income Tax, E-filling of return can be done for Previous 2 Years only.

60. PAN Card is essential for Taxpayer and it should not be used as Id Proof.

61. From FY 2014-15 Depreciation is to be calculated as per New Companies Act.

62. Domestic Transfer Pricing is applicable on transaction exceeding an Amount Rs.20 

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