Income tax is a tax paid by an individual or a citizen of a country. It depends on the degree of income and earnings earned by an individual during a financial year. The government of a country decides the rate of the tax that has to be paid. The individuals who earn more, or say, come under the higher income slab are taxed at higher rates than the people who fall under the lower or average income slab. Income tax comes under direct tax as it is extracted from the earnings of an individual in a financial year. The tax that is to be paid or the taxable income is determined after making some appropriate deductions.
The income tax calculator is an easy and effective online tool. It can very conveniently help in calculating and estimating the taxable income. A person can calculate tax by filling in some essential details. The details, which are needed to be put, are as follows:
- Age needs to be filled in. It will determine the relevant tax band.
- Annual salary is one of the most important things, which needs to be filled in. It specifies the amount of tax that needs to be paid.
- Your health insurance premium (if you have any kind of health insurance policy) needs to be added.
- If any home loan is taken, add the interest, which is being paid.
- Similarly, if any education loan is taken, the interest needs to be put in.
These are some of the fields, which need to be filled thoroughly.
However, there are certain incomes, which are non-taxable. Such as, income up to 2.5 lakh do not incur any taxes. Moreover, a person is granted a full rebate of the tax if the income is under 5 lakh per annum.
Before paying an income tax, there is a process of filing about the income and tax theorem. An individual files an income tax return with the income tax department. It is a form in which he files the data about his income and the tax which might be payable, accordingly. This form is being submitted to the income tax department by an individual.
Tax return calculator helps in calculating the income tax return. It is an easy and effective online gadget, which helps in calculating the return. There are some fields, which are to be filled appropriately. This will help to generate accurate and correct results.
As already mentioned, income tax is a direct tax and this tax helps the government to build, improve and maintain the infrastructure of the country. It is used for other developments in the country as well. Along with this, money earned in the form of income tax is also used for paying the center and state government bodies. The income tax act of India was passed in 1961. Every citizen with the specified income is surely supposed to pay the tax. A person, in any case, if escapes from paying the tax, can be put behind the bars as it is an illegal act.