What is Tax in India?
Failure to pay taxes could be penalizing & incriminating for evaders. Any tax system introduced by the government must abide by the Constitution of India.
Any administration requires capital to keep their institution afloat. Public and private bodies alike need revenue to operate. Similarly, for the Government to serve the people and develop the country, it needs money. Now, where does this inflow come from?
Introduction
Income tax is one of the sources of income for the Government of India based on the revenue generated by businesses and individuals.
In India, the Income Tax Department undertakes the direct collection of tax.
The amount is supposed to fund public services, fulfill government obligations, and secure essential services for India’s people.
Who pays the income tax?
As of the fiscal year 2020-21, anyone under the age of 60 will pay tax with an income over 2.5 lakh.
Tax is levied generally on your earnings and wages.
Here are some of the sources of income on which you need to pay tax –
- Salaries, allowances leave encashment.
- House property (owned or rented)
- Capital asset
- Business
- Income from savings accounts, family pension, fixed deposits
The amount of tax depends on the slabs defined by the pre-existing or new tax regime.
The Union Budget 2020 introduced a new but optional tax regime. It foregoes 70 tax-exemptions and deductions.
If you have any queries regarding income tax and the tax regime, fill-up the form on our website and contact legal experts.
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