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What is exactly Income Tax?
Taxation has been part of Indian society for a long time. The famous Ashoka’s pillar, Manu Smriti, and even Kautilya’s Arthashastra (which is a book on, The art of governance and foreign policy) mentions that – “From the treasury comes the power of the government, and the earth, whose ornament is the treasury, is acquired by means of the treasury and army”
In simple terms, Income tax is collected to give citizens thousand of other facilities. To fill the treasure under British rule first income tax was levied in the year 1860 and since then Income Tax has in itself has become a huge umbrella.
In financial language, it is the direct tax levied by the central government under Income Tax Act 1961. Tax is collected from the salaried person, or income from house property, any capital gains, and other income.
What are the major Deductions?
As the name Income Tax comes into the minds of people, the feeling of losing money comes. So, to take care of this, the Government of India with the aim to inculcate as well as encourage savings and investment amongst taxpayers has provided various beneficial deductions. Among all 80C is the most known one as it reduces taxable income by making tax-saving investments. 80 C allows deductions in investments made in Public Provident Fund, Pension Schemes, Employee Provident Fund, Life Insurance premium, and other schemes.
Apart from 80 C, there are other deduction plans which are beneficial.
What is Income Tax Return?
Income Tax Return is the annual record of income earned and other tax liability paid during the applicable year. This record is submitted to the government tax authority in a pre-defined format. This whole process of income tax return filing is called an Income Tax Return.
As an individual, entrepreneur, small, medium, or large organization needs to be well aware of tax payouts. Since it involves a huge sum of money tax planning is the best way to tackle all types of income tax returns so that one can reduce tax liability.
What are the Tax Slabs
Just like every individual has different clothing fitting, similarly, according to the individual financial status, one is taxed. To make things the simpler government has defined Tax-slabs and rates which helps one in Income tax return preparation.
What are different ITR Forms
As a person is supposed to submit Income Tax, the Income-tax department has framed 7 types of forms according to individual income and tax slabs. The seven forms are called ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6, and ITR-7.