Firstly, are you supposed to pay Income Tax?
The submission depends a propos the year. For your allowance for the year 2011-12 (1st April, 2011 to 31st March, 2012), you will have to pay tax if
you are a resident man once a taxable pension of greater than Rs. 1,80,00
you are a resident girl behind a taxable allowance of on summit of Rs. 1,90,000
you are a resident senior citizen (age 60+) subsequent to a taxable pension of again Rs. 2,50,00
you are a resident no evaluate senior citizen (age 80+) subsequent to a taxable pension of on summit of Rs. 5,00,000
How much tax am I supposed to pay?
You must have heard of ‘Income Tax Slabs’. For a resident male, the slabs for the year 2011-12 are
Income Slab – 0 to 1,80,000
Rate – 0%
Income Slab – 1,80,001 to 5,00,000
Rate – 10%
Income Slab – 5,00,001 to 8,00,000
Rate – 20%
Income Slab – above 8,00,000
Rate – 30%
This means that if your pension is less than 1,80,000 you don’t have to pay tax.
If your pension is, make known, Rs. 2,30,000, you have to pay at 10% very just about the amount by which it exceeds Rs. 1,80,000. In this combat your tax answerability would be (2,30,000 – 1,80,000) *.10
And if your allowance is, make known, Rs. 6,00,000, you have to pay tax in financial description to Rs. 3,20,000 ( 5,00,000 – 1,80,000 ) at 10%, and in financial fable to the order of Rs. 1,00,000 ( 6,00,000 – 5,00,000 ) at 20%.
For more info taxfyle.com/sales-tax-calculator
So, that means all year I have to accretion the Income Tax Department and pay it?
Most probably, no. To make things easy re your subside, the Department makes your employer realize the same. Your employer will deduce it from your salary and pay it for you. This is called TDS – Tax Deducted at Source.
What is this Form 16?
How realize you know if your employer is paying your tax in relation to the order of era? and what is the amount?
Your employer will present you a Form 16 at the grow less of a year. This form 16 has details very approximately the salary he has paid to you, the tax he has deducted in this area it, and paid to the Income Tax Department.
What is Advance Tax / Self-Assessment Tax?
Your employer will deduce tax upon your salary allowance and pay it to the Income Tax Department, but what if you have income from connection sources as dexterously?
Say, you sold a fragment of burning and made a decent profit upon it. You now have to pay tax upon this profit. Unfortunately, your employer won’t pay it. You will have to get bond of it.
Take marginal lawsuit. Your employer did not deduce tax upon your salary. He will direction penalties from the Income Tax Department, but what approximately you? You will now you have to pay it to the Income Tax Department directly. It’s a rare court dogfight.
This is called Advance Tax / Self-Assessment Tax
Is there any difference amid the above two?
Yes.
If you pay it during the year, i.e., in the middle of 1st April, 2011 and 31st March, 2012 (for 2011-12) it is called Advance Tax.
If, even if preparing your tax recompense, you make a buy of that you yet have to pay tax, and pay it appropriately, it is called Self-Assessment Tax. Thus Self-Assessment Tax is paid after 31st March, 2012.
What are income tax deductions?
Deductions are immovable tax assist you might be allowed to avail. If your income is Rs. 4,00,000, and you are allowed to deductions of Rs. 1,00,000, you will abandoned have to pay tax upon Rs. 3,00,000 at the slab rates.
There are numerous deductions. Example:
Premium paid upon a Life Insurance Policy
Housing Loan Repaid
Amount deposited in a PPF (Public Provident Fund) Account
Certain Mutual Funds purchased
ULIPs purchased
Ok, so my employer pays tax almost my behalf. So, my job is done? I don’t have to reach whatever, right?
Not really. You have to file an income tax reward following than the Income Tax Department. A compensation is nothing but a form that states the income you have earned throughout the year, the tax you were supposed to pay not in the make distant off from, that tax you actually paid, the encourage you availed, etc…
