Few basics of Income tax we all should be aware of. For detailed information and rules and regulations of tax refer the links give as hyper link at the end.
1.12 WHO ALL HAVE TO PAY INCOME-TAX ?
- Individual including Non-resident, Hindu Undivided Families (HUF), Bodies of Individuals (BOI), Association of Persons (AOP) & Artificial Juridical Persons ( such as Deities of Temples) having taxable income exceeding Rs. 1.5 lakh (Rs. 1,80,000 for Resident Women assesses below 65 Years and Rs. 2,25,000 for Resident Senior Citizens.)
- Societies & Charitable / Religious Trusts having taxable income exceeding Rs.1.5 lakh.
- All Partnership Firms irrespective of their Income.
- Co-Op. Societies irrespective of their Income.
- All Companies irrespective of Income.
- Local Authorities like, Panchayats, Municipal Corporation etc.
g. Income Tax is charged on 5 different heads. Aggregate of taxable income under each head of income is known as Gross Total Income and
so Taxable Income = Gross Total Income - Allowance Deductions.
Deduction of Expenditure :
In computing income under various heads, deduction is allowed towards expenditure incurred in relation to earning the income. However, no deduction shall be allowed in respect of expenditure incurred in relation to incomes exempt from tax.
Computation of Gross Total Income :
It is the aggregate of incomes under various heads of income calculated after set-off of unabsorbed depreciation/loss, carried forward from earlier years.
Set-off and Carry Forward :
Set-off means adjustment of certain losses against the income under other sources / heads. Carry forward implies carrying forward of certain losses for set-off in subsequent years.
Total / Taxable Income :
Total / Taxable Income is computed after deducting permissible deductions under section 80A to 80U, from the Gross Total Income.
Where the Gross Total Income of the Assesses includes Short-Term Capital Gains from transfer of equity shares / units of an equity oriented mutual fund subject to Securities Transaction Tax or any Long-Term Capital Gains, then no deduction shall be allowed against such Capital Gains.
On this Taxable Income, Income Tax will be calculated as per the applicable rates.
so Taxable Income = Gross Total Income - Allowance Deductions.
Deduction of Expenditure :
In computing income under various heads, deduction is allowed towards expenditure incurred in relation to earning the income. However, no deduction shall be allowed in respect of expenditure incurred in relation to incomes exempt from tax.
Computation of Gross Total Income :
It is the aggregate of incomes under various heads of income calculated after set-off of unabsorbed depreciation/loss, carried forward from earlier years.
Set-off and Carry Forward :
Set-off means adjustment of certain losses against the income under other sources / heads. Carry forward implies carrying forward of certain losses for set-off in subsequent years.
Total / Taxable Income :
Total / Taxable Income is computed after deducting permissible deductions under section 80A to 80U, from the Gross Total Income.
Where the Gross Total Income of the Assesses includes Short-Term Capital Gains from transfer of equity shares / units of an equity oriented mutual fund subject to Securities Transaction Tax or any Long-Term Capital Gains, then no deduction shall be allowed against such Capital Gains.
On this Taxable Income, Income Tax will be calculated as per the applicable rates.
| Income Tax Rates / Tax Slabs (AY-2011-2012) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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