Income Tax Basics For Young Professionals

So you may have solely simply began incomes and are on the trail of self discovery particularly on the subject of your monetary life, proper? And one of many very important points to that might be – taxes. Understanding tax just isn’t straightforward, however very a lot mandatory. So, lets take it one step at a time – we’re going to particularly have a look at – Revenue Tax. Listed below are among the frequent confusions and related explanations surrounding the entire course of.

What’s earnings tax?

Revenue tax is the tax you pay to the federal government. It’s primarily based on the earnings you earn, i.e. when your earnings exceeds a sure slab, then you might be required to pay tax on the surplus quantity earned.

Why ought to I pay tax on my earnings?

Each citizen is obligated to pay earnings tax as per regulation [Income Tax Act]. The collected sum is used for additional improvement of the nation.

How a lot ought to I pay?

The quantity of tax you’ll have to pay is solely depending on which earnings slab your wage falls in. The share of tax to be paid can even differ relying on:

1) Whether or not you’re a man, lady or a senior citizen [the income slabs are different for all three]

2) Your earnings and the slab it belongs to(that’s particular to you). As an example, the tax payable by somebody who’s incomes between 180,000 and 500,000 can be 10% of the quantity that exceeds 180,000.

Equally, if the earnings is between 500,000 and 800,000, then the taxable earnings is a hard and fast quantity plus 20% of the quantity that exceeds 500,000 and so forth.

How usually ought to I pay?

Revenue Tax is paid on a yearly foundation. The length thought of right here is between April 1st to March thirty first of the subsequent 12 months. This era is also referred to as a monetary 12 months or ‘earlier 12 months’.

And the final date to file your earnings tax returns could be July thirty first.

The right way to file earnings tax?

Submitting Revenue tax is usually a daunting activity, which is why you must choices:

– doing it your self

– participating a superb chartered accountant.

You even have the ability of submitting earnings tax on-line or offline.

What are the paperwork required for submitting tax?

The paperwork to be submitted whereas submitting are as follows:

1. Type 16 – is given to you by the corporate you’re employed for. It consists particulars of the tax that was deducted out of your wage. That is the principle indication that you’ve got paid earnings tax.

2. Type 16A – is given to you by the financial institution or monetary establishment the place you may have invested in time period deposits. This means the assorted tax deductions at supply in your account.

3. Financial institution Assertion Abstract – reveals the transactions carried out by you all through the monetary 12 months. This may embody all the things from financial savings, investments, bills, loans and in addition earnings earned.

4. Property particulars – any property offered or purchased by you within the earlier monetary 12 months needs to be recorded and duly submitted on the time of submitting tax returns.

5. Curiosity certificates – In case you might be paying month-to-month installments in direction of your housing mortgage, if you wish to save on tax, then you’ll have to present the supporting paperwork within the type of curiosity certificates from the establishment that offered you the mortgage.

6. Funding particulars – if you have not already declared it within the Type 16, then do it right here. Particulars of your investments in tax saving instruments akin to public provident fund and so forth.

7. Receipt of advance tax (if any) – to point out that you’ve got paid advance tax.

Is the wage I obtain the one type of earnings?

No, there are numerous sorts of taxable earnings:

1. Your wage
2. Rental Revenue (if any)
3. Revenue from enterprise
4. Capital features (for eg, sale of property)
5. Incomes from financial institution deposits, money items and so forth.

Among the key factors to be saved in thoughts whereas submitting earnings tax are as follows:


  • Be certain that your signature is uniform throughout all of the paperwork you utilize for submitting
  • Don’t overwrite or misspell within the kind
  • Double verify the PAN quantity you may have given.
  • Even the date written issues
  • Authentic TDS certificates and receipts to be produced on the time of submitting.
  • Keep away from delay fee of tax because it attracts a wonderful.


Searching for extra concepts to assist handle your funds higher? For starters, go to andorra income tax

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