FAQ's in General
It is a tax levied by the Government of India on the income of every person. The provisions governing the tax on Income are covered in the Income-tax Act, 1961.
Income-tax shall be levied on the annual income of a person. The year under the Income-tax Law is the period starting from 1st April and ending on 31st March of next calendar year. The Income-tax Law classifies the year as (1) Previous year, and (2) Assessment year.
The year in which income is earned is called as previous year and the year in which the income is charged to tax and filing the tax return is called as assessment year.
e.g., Income earned during the period of 1st April, 2020 to 31st March, 2021 is treated as income of the previous year 2020-21. Income of the previous year 2020-21 will be charged to tax in the next year, i.e., in the assessment year 2021-22.
Income-tax is to be paid by every person who’s income exceeds the basic exemption limit. The term ‘person’ as defined under the Income-tax Act under section 2(3) covers in its ambit natural as well as artificial persons.
For the purpose of charging Income-tax, the term ‘person’ includes Individual, Hindu Undivided Families [HUFs], Association of Persons [AOPs], Body of individuals [BOIs], Firms, LLPs, Companies, Local authority and any artificial juridical person not covered under any of the above.
Agricultural income is not taxable. However, if you have non-agricultural income too, then while calculating tax on non-agricultural income, your agricultural income will be taken into account for rate purpose. For meaning of Agricultural Income refer section 2(IA) of the Income-tax Act.
For every source of income and expense you have to maintain the proof and the records specified under the Income-tax Act. In case no such records are prescribed, you should maintain reasonable records with which you can support the claim of income and expenditure.
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Yes, such winnings are liable to a flat rate of tax at 30% without any basic exemption limit. In such a case the payer of prize money will be deducted as a tax at source (i.e., TDS) from the winnings and will pay you only the balance amount.
An exempt income is not charged to tax, i.e., Income-tax Law specifically grants exemption from tax to such income (Ex. Agricultural income in India). Incomes which are chargeable to tax are called as taxable incomes.
Advance tax is to be calculated on the basis of expected tax liability of the year. Advance tax is to be paid in instalments as given below:
a) In case of all the assessees (other than the eligible assessees)
- Atleast to 15 per cent – On or before 15th June
- Atleast to 75 per cent – On or before 15th December
- Atleast to 45 per cent – On or before 15th September
- Atleast to 100 per cent – On or before 15th March
- b) In case of eligible assessee,
100 per cent – On or before 15th March
Note: Any tax paid on or before 31st day of March shall also be treated as advance tax paid during the same financial year.
The deposit of advance tax is made through challan ITNS 280 by ticking the relevant column, i.e., advance tax.