Income Tax Regulations

INTRODUCTION

In India income tax is regulated by the Income Tax Act, of 1961, to amend the rules related to it Central Board of Direct Taxes can do it. Income tax is a percentage of the income that is given to the government in the form of income tax, it is a direct tax where the businessman or individuals give some tax to the central government from their income during the financial year, it is charged every year by the central government. The process of paying Income tax is quite simple the individual can pay online or office.

Many people escapes from paying the tax this is called tax evasion, they hide their real income and show less income they are earning this is a kind of white-collar crime, mainly committed by businessman or persons who are higher in authority also there is lots of business for the normal individual or the persons who are higher in authority as the normal people they pay income tax but the high authority people they somehow escape from this due to their approach with another people. Income tax is paid by the individual whose annual income exceeds more than 3 lakh, there are different percentages provided under the Income Tax Act, 1961, different percentage for different annual income, the higher the annual income according to it income tax is levied.

WHO PAYS INCOME TAX?

Any individual whose annual income exceeds more than 3 lakhs will be paying Income tax and if there is a senior citizen whose annual income is 3 lakh he will be also paid if there is a super senior citizen whose annual income is more than 5 lakh he will be paying Income tax, though some rebates are provided but they will be levied.

Many people pay for this just as judicial persons, normal people, businessmen, corporate firms, associations, authorities, companies, etc. There are different types of taxes which are as follows:

TYPES OF TAXES

Professional tax: This kind of tax is paid by business individuals, teachers, doctors, etc. as they work in their field due to their professionalism so they are also levied to pay for this kind of tax.

Property tax: We have seen that many people pay their house rent so this is also a part of their income so out of these they have to pay for property tax.

Capital gain: People who generate their income from selling assets that are in surplus are also entitled to pay this tax.

 Other source income- Income is generated from the banks where we deposit money in the form of savings accounts, recurring, or fixed so we get interest from these accounts, and this is also counted as an income so some part is also paid to the Central government as a tax.

Salary tax: People who get a salary or pension so some part of these all they have to give to the central government as a salary tax.

There are different rates provided for the different age groups in India, the individuals pay the tax but senior citizen and senior most citizen also pays for the same.

INCOME TAX RULES

Though income tax is guided by the act Income Tax Act, of 1961, it changes according to the situation when there is inflation or deflation it changes accordingly. The rules that it provides we cannot override it any circumstances. The government collects the tax into three different categories- Advance and self-assessment tax, taxes collected at source (TCS), and taxes deducted at source (TDS). The income tax department is the main which handles the tax expenditure, income, and other acts by the union budget. The Central Board of Direct Tax (CBDT) plans the procedure regarding the income tax act with whom it will be dealing. Only the government doesn’t need to collect taxes but also they give some rebates to the individuals whenever it is needed. There are certain provisions where if we pay an extra amount of tax to the government we can claim our refund through income tax refund. Certain individuals work in companies and they also pay the tax the employer is the one who deducts the tax from their salary so by chance if the employer deducts an unreasonable amount of tax the employer can claim a refund. For example, if the employer deducted 20,000 and the tax amount was 10,000 so employee can go for a refund.

 If you’ve made investments that can reduce the amount of income tax you owe but forgot to tell the government about them, you might have paid more tax than you should have. You can get that extra money back as a refund. To see if you’re eligible for a refund and to check the status of your refund, you can visit the Income Tax Department’s official website.

INCOME TAX SAVING INVESTMENT

There are different options where we can have savings from the income tax, these could be

Investment- We can make investments in different areas such as mutual funds and can claim deductions under the provisions given in the act.

Insurance- There is life insurance and health insurance for the people so for this as we all know we have to pay for this so we can get a deduction under the provisions provided.

Home loans- when we take home loans from the bank for the construction or renovation of our houses some people take loans from the bank and also we are given a deduction of up to 1.5 lakhs which is paid for tax.

National saving certificate- Under this, we can start depositing from a low amount for a particular period and certain deductions are being provided.

Fixed deposit- We deposit some amount of money in a lump sum amount in the bank for a particular period and the interest is earned so for this no amount of tax is to be paid.

Provident fund- The employees who are working open a provident fund in this case they also get a deduction from the tax.

There are certain sections given under the Income Tax Act 1961 and these sections are Section 80C, Section 80CCC, Section 80CCD, Section 80D, and many more sections.

CONCLUSION

From above we can conclude that the central government collects revenue in the form of tax and much more, the government earns by imposing tax or GST. Many people may find it difficult to pay for the tax but there are certain benefits provided to them so that they could get some deduction from paying from tax. We have seen that many big businessmen escape from paying from tax as they have to pay high amounts of tax also they are exempted which is not fair for the people who find it difficult to pay taxes, the government should look into these matters and they should treat all the people equally as we can see that many people commit white collar crime which is tax evasion so this matter should be taken into consideration.

REFERENCES

https://www.bankbazaar.com/income-tax.html

https://cleartax.in/s/income-tax