Description
It is mandatory for individuals, NRIs, partnership firms, LLPs, Companies, Trust to file income tax returns each year. Individuals and NRIs are required to file income tax return, if their income exceeds the exemption limit. Partnership firms are required income tax return – irrespective of amount of income or loss. All companies are mandatorily required to file income tax return. Finally, it is mandatory for most types of trust to file income tax every year, while some types of trusts are required to file return of income if its gross total income exceeds the exemption limit.
What is Income Tax?
What are Previous Year & Assessment Year?
Who is liable to pay Income Tax?
Every person is liable to pay tax in India if his total income is more than the income notified by the government in the slab rates. Here, the definition of person includes :
- An Individual
- A Hindu Undivided Family (HUF)
- A Company
- A Firm
- An Association of Persons (AOP) or a Body of Individuals (BOI)
- A Local Authority
- Artificial Juridical Persons
On what amount is Income Tax Calculated?
For calculating income tax, notified slab rates are applied to the taxable income of a person earned during the previous year. Taxable income is to be calculated as per the provisions and rules contained in the Income Tax Act, 1961. One has to calculate income under various heads of Income and net them after deducting deductions available under Chapter VI-A to get Net Income Chargeable to Tax.
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