Income Tax in India :: Tax Taxes Taxation

Income Tax Estimator Income tax is a tax imposed on any individual or by a corporate by the government who earns income. In simple words, it is the tax paid on income. A survey says that paying Tax has been in existence for more than 2,500 years. People need to pay tax based on their profession. India is a pioneer in developing a stable tax system. The source for the income may be from salary, House/Property, Business and Profession, capital gains, and income from other sources. This tax is the contribution by an individual or group of individuals for the development of the Country. Income from Salary: All income received in the form of salary can be taxed. It is the money received by an individual from an employer. †¢ Medical reimbursements (up to INR 15,000 /yr) are tax free when it is supported by necessary bills. †¢ Conveyance allowance (up to INR 800/month) is tax free and no bills are required. Income from House / Property: Income from House or other property is estimated from the Annual value. The annual value includes the Rent received, Municipal Valuation and Market value. Capital Gains: Capital gains are form of income acquired from selling capital assets. The capital assets include real estate, equity, shares, bonds, Jewellery, art work and paintings etc. Sale of capital assets is a form of income. Income Exempt from tax: †¢ Any Money received from an Insurance company by maturity of an insurance policy is an income which has tax exempt. †¢ Income from Public Provident Fund (PPE). †¢ Some deduction also comes under tax exempt if the total limit of the deduction is not more than INR 100,000. The deductions can be from any one of the following: †¢ Contribution for Provident Fund †¢ Money paid for life insurance scheme. †¢ Investment in pension plans. †¢ Investments in mutual funds. †¢ Investment in National Savings Certificates. †¢ Re - payment of housing loans or any registration fee paid. †¢ Payments made for tuition fees for children paid to school or college or any other educational institution. Medical insurance: Medi-claim policies provide us a deduction from tax up to INR 15000 and for the senior citizens it is INR 20,000. This deduction is not applicable only for the amount paid for them but also for the amount paid for their spouse, parents or children. Interest paid on Housing Loans: Interest paid on a housing loan up to INR 150,000 per year is tax free. Tax brackets: Income tax brackets for individual is divided into three slabs Income tax is not applicable for individuals whose annual income does not exceeds INR 110,000 and for women it is INR 145,000 and INR 195,00 for senior citizens.