Income Tax is a kind of tax that is levied by government on the
income generated from different sources. It is a direct tax, that is paid
directly by the taxpayer to the Government of India. Income Tax is one of the
major sources of income for the Government, which is thereafter used to fund
public services, payment of government obligations and provide goods and
services to citizens. Income Tax is imposed on individuals and entities that
varies with the income or profits of the taxpayers. Hence, every individual must
e-file income tax return during the
financial year.
Income Tax is calculated as the
product of tax rate times the taxable income of the taxpayer wherein the tax
rate may increase as the taxable income increases. The tax rate can vary as per
the type of taxpayer as well depending on their age and income. However, the
government has different provisions wherein credits are provided to taxpayers
in the form of refund when they file their Income Tax Return in order to
reduce the burden of tax.
What is the reason for tax imposition?
Following are the reasons for tax imposition: -
·
To raise money for govt. expenditures
·
To redistribute income among the people
·
Social development
·
Demand management
·
To correct market failures
Why we, as taxpayers, need to
pay Income Tax?
·
Income
Tax return e-filing is one of the major taxes in our country
that every earning individual and company needs to pay.
·
The constitution of India gives its government
to collect taxes in order to provide services and goods to its citizens, to
borrow money in times of need or to prepare for war in case the need arises.
·
Furthermore, since Income Tax is one of the
major taxes in our country, it helps to fund most of the big projects such as
meeting the defense needs of a nation and development of the country.
What is Income Tax calculator?
Income Tax
calculator provides assessee to calculate their tax liability. It will
provide you with an accurate insight to your income tax obligations.
How income tax is calculated?
In present, the income tax slabs
and exemption limits has been divided on the basis of age and residential
status. There are three major components of income tax calculator they are
gross taxable income, HRA exemption, and transport
allowance.
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