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Form 16 is a vital document for a salary taking individual, especially if the employer has deducted tax on his/her income. Form 16 is basically a certificate provided by the Employer to the employee displaying the amount of tax deducted from the salary income and deposited with the Government. When an employee files his income tax return, Form 16 helps him to see how much tax has already been paid and to avail the credit for the same while filing the Income-tax return.
Income tax filing is mandatory compliance to a person including Individual, Partnership firms, LLP, Company, etc. to report their total income during a financial year and tax liability arising on the same. This eases the Government to collect the tax and incur more expenditure for the public welfare and also calculate the growth of the nation. This also benefits the taxpayer/person filing the return in various ways mentioned below.
You shall be surprised upon receiving an intimation/notice from the Income-tax department although your Income-tax return is filed within the due date. At such times, you may get confused and may not be sure about what it means and how to prepare a response to the same. Also, encountering disputes in opinions from tax authorities, litigations, questionable assessment notices may lead to rough times for any organisation. Hence, it is essential to have a credible consultant for assistance.
At ICI, we will track down your notice/disputes/litigations in detail and offer complete support by handling them on your behalf.
Tax planning and structuring is a process of analysing the situation or a financial plan form tax perspective. The primary and vital objective of tax planning is Tax efficiency. This mark can be achieved by taking into consideration the investments expense, retirements planning schemes and other deductions based on the status of the person. Hence an effective tax planning can assist in reducing the Income tax liability.
Any Indian individual under the age of 60 who earns more than Rs 2.5 lakhs must pay income tax. Similarly, individuals above the age of 60 who earn more than Rs 3 lakhs must pay taxes. Furthermore, citizens above the age of 80, having income exceeding Rs. 5 lakhs, are also entitled to pay taxes.
Income Tax from salary is the sum of Basic salary + HRA + Special Allowance + Transport Allowance + any other allowance. Some components of your salary are exempt from tax, such as telephone bills reimbursement, etc.
Direct taxes and indirect taxes are the two types of taxes in India. Both taxes are implemented differently. Some of them are paid directly, such as the income tax, corporate tax, and wealth tax, while others are paid indirectly, such as sales tax, service tax, and value-added tax.
Individuals, HUFs, AOPs, and BOI taxpayers are taxed based on their income slab, while firms and Indian companies have a fixed rate of tax computed on their profits. People’s incomes are grouped into tax brackets or tax slabs, and the tax rates vary depending on the tax slab.
It is highly advised not to ignore any notice issued by the Income-tax department. Ignoring notice/demand/order issued by the Income-tax department may lead to penalty and prosecution under the Income-tax Act, 1961.
You are not required to file income tax returns if your gross income is below the basic exemption amount. Those individuals with a gross income of less than Rs 2.5 lakh who want to claim an income tax refund can only do so by filing an ITR. Otherwise, if your income exceeds the basic exemption limit, you are mandatorily required to file income tax returns.
Income tax applies to individuals, corporations, businesses, and all other establishments that generate income. Even though income tax is paid every month from the monthly earnings, it is calculated annually. The amount of income tax a person must pay is determined by a variety of factors.
An Individual or organization with a valid TAN and responsible for tax deduction must file quarterly TDS returns as per the law. However, no TDS return shall be required to file if TDS is not required to be deducted during that particular quarter.