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​What is Income-tax?

It is a tax levied by the Government of India on the income of every person. The provisions governing the Income-tax are covered in the Income-tax Act, 1961.​

​What is the administrative framework of Income-tax?

The revenue functions of the Government of India are managed by the Ministry of Finance. The Finance Ministry has entrusted the task of administration of direct taxes like Income-tax, Wealth tax, etc., to the Central Board of Direct Taxes (CBDT). The CBDT is a part of Department of Revenue in the Ministry of Finance.

CBDT provides essential inputs for policy framing and planning of direct taxes and also administers the direct tax laws through the Income-tax Department. Thus, Income-tax Law is administrated by the Income-tax Department under the control and supervision of the CBDT.​

​What is the period for which a person’s income is taken into account for the purpose of Income-tax?

Income-tax is 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 is called as assessment year.

e.g., Income earned during the period of 1st April, 2017 to 31st March, 2018 is treated as income of the previous year 2018-19. Income of the previous year 2018-19 will be charged to tax in the next year, i.e., in the assessment year 2019-20.​

​Who is supposed to pay Income-tax?

Income-tax is to be paid by every person. 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.

Thus, from the definition of the term 'person' it can be observed that, apart from a natural person, i.e., an individual, any sort of artificial entity will also be liable to pay Income-tax.​

​How does the Government collect Income-tax?|Can tax payer pay the tax voluntarily | Where can tax payer pay the advance tax?| where can tax payer pay the self assessment tax ?|

Taxes are collected by the Government through three means: a) voluntary payment by taxpayers into various designated Banks. For example, Advance Tax and Self Assessment Tax paid by the taxpayers, b) Taxes deducted at source [TDS] from the income of the receiver, and c) Taxes collected at source [TCS]. It is the constitutional obligation of every person earning income to compute his income and pay taxes correctly.​

How will I know how much Income-tax I have to pay?| How can I calculate tax liability?| Is there any tax calculator available? |How can calculate my advance tax liability| What are applicable tax rates?| From where can get the income tax calculator?|How can calculate my tax liability ?

​​The rates of Income-tax and corporate taxes are available in the Finance Act passed by the Parliament every year. You can also check your tax liability by using the free online tax calculator available at www.incometaxindia.gov.in

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Click here to check your tax liability

Click he​re to view tax rates

​From where can I take the help of any expert on Income-tax related matters?

You can take the help of tax professionals or the help of Public Relations Officer [PRO] in the local office of the Income-tax Department. You may also take assistance from Tax Return Preparers [TRPs]. You can locate your nearest TRP at www.trpscheme.com

In the Challan there are terms like Income-tax on companies & Income-tax other than companies. What do they mean?| I am individual paying the self assessment tax. Which option is to select in "Tax applicable while filling the challan 280?| Which option is to select in " tax applicable " option while a individual paying the income tax through challan 280 ?| When does select Income-tax (other than Companies)-0021 in challan 280.? |When does select Income-tax on Companies (Corporation tax)-0020 in challan 280.?

The tax that is to be paid by the companies on their income is called as corporate tax, and for payment of same in the challan it is mentioned as Income-tax on Companies (Corporation tax)-0020. Tax paid by non-corporate assessees is called as Income-tax, and for payment of the same in the challan it is to be mentioned as Income-tax (other than Companies)-0021.

​How is advance tax calculated and paid?

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 as referred to in section 44AD and 44ADA) :
    i) Up to 15 per cent – On or before 15th June
    ii) Up to 45 per cent – On or before 15th September
    iii) Up to 75 per cent – On or before 15th December​
    iv) Up to 100 per cent –On or before 15th March
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Up to 100 per cent – On or before 15th March

Note: Any advance tax paid on or before 31st day of March shall also be treated as 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.​


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