Income Tax Terms for Beginners
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Income Tax Terms for Beginners
Stressing out about filing your income tax for the first-time as a salaried employee?
Don’t worry, you’re not the only one.
Did you know, even the great Albert Einstein had trouble understanding taxes? He even said that understanding income tax is the hardest thing in the world.
Well, we’ll do our very best to make it simple for you.
Iss video mein hum aapko saare essential income tax terms briefly samjhayenge for an easy tax filing experience.
The first one on this list is the Previous Year. The previous year, also known as the financial year, is the one that precedes the assessment year.
Assessment Year - The assessment year is the year that follows the previous year during which you will “assess” and file your returns.
For example, if you file your taxes on the 15th of July this year, then your previous year will be 2022-23, and the assessment year will be 2023-24.
Gross Total Income - Gross total income mein kaafi saare elements hain Jaise ki:
-Aapki salary
-Capital gains
-Income from property
-Profits from a business
-Aur income from other sources
Jaise ki:
-Winnings from lotteries, races, betting of any nature
-Income from stock trading, dividends, investment earnings and so on
Deductions - IT department kuch specific sections ke under deductions allow karti hai taaki aapki tax liability kam ho jaaye.
Jaise ki, house rent allowance, section 80 deductions on health insurance, life insurance, ELSS, etc.
For example, if you’ve taken a loan to pay for the higher education of either yourself, your spouse, or your children, under Section 80E, you will be able to get a tax deduction on the interest that you pay on the education loan, thereby reducing your total taxable income.
Net Taxable Income - The income that you get after you subtract the deductions from your gross total income is known as the net taxable income. Iss income pe aapko tax bharna hoga.
TDS - Aapne kaafi baar TDS ka naam suna hoga. Kuch payments aap tak pohonchne se pehle hi tax deduct ho kar aati hain. Isey tax deducted at source ya TDS kehte hai.
Salary, professional fees, interest on bank deposits, consultation fees, rent payment, etc. pe Income Tax Act ke tehet TDS lagta hai.
Income Tax Return - ITR is a process of reporting your income and the subsequent taxes to the IT department. There are various forms to file your ITR as per your applicability.
Form 16 - Form 16 woh form hai jo aapka employer issue karta hai aur yeh aapke ITR filing process ke liye important hai. Is mein aapke income tax ki saari jaankaari maujood hoti hai.
Surcharge - This only applies to you if you’re a high net worth individual and fall under a higher income tax slab. In this case you may be liable to pay an additional tax, apart from the applicable tax rate. This is also known as tax on tax.
For instance, if your income lies between ₹50 Lakhs to ₹1 Crore, you will be liable to pay a surcharge that’s 10% of your income tax.
Aur ab jab aapne yeh saare important terms samajh liye hain, toh aap seamlessly apna ITR file kar sakte hain.
For more interesting content on income tax, stay tuned!