Hello friends, welcome to your blog Tech Iconic. Today I will discuss about income tax for business through this article.
Income tax is a type of tax that the central government levies on the income earned by individuals and businesses during a financial year. taxes are a source of revenue for the government. the government will use this revenue to develop infrastructure, health care, education, farmers/farmers. it does subsidies to the agriculture sector and other government welfare schemes.
There are mainly two types of taxes, direct taxes and indirect forms of tax. The tax levied directly on the income earned is called direct tax, for example income tax is a direct tax. The tax calculation is based on income slab rates applicable during that financial year.
What is Income Tax?
Income Tax Return (ITR) is a form that is used to file information about your income and tax to the Income Tax Department. The tax liability of the taxpayer is calculated on the basis of his income. If the return shows that additional tax has been paid during a year, the person will be eligible to receive income tax refund from the Income Tax Department.
As per income tax laws, returns must be filed every year by a person or business that earns any income during a financial year. income can be in the form of salary, business benefits, income from home property or dividends, capital gains, interest or other sources.
A tax return has to be filed by a person or business before a specified date. If a taxpayer fails to comply with the deadline, he will have to pay a penalty.
Is it mandatory to file income Tax Returns?
As per the tax laws laid down in India, it is mandatory to file an income tax return if your income exceeds the original exemption limit. the rate of income tax for taxpayers is decided in advance. delay in filing returns will not only entail a late filing fee, but will also hamper the possibility of getting a loan or visa for travel purposes.
Who should file Income Tax Return?
As per the Income Tax Act, income tax is to be paid only by individuals or businesses who fall under certain income group. Mentioned below are institutions or businesses which are required to mandatorily file their ITR in India.
- All persons up to the age of 59 years, whose total income for a financial year is more than Rs. 2.5 lakh. For senior citizens (60-79 age group), the limit has been increased to Rs. 3 lakhs and for most senior citizens (80 years of age and above) the limit is Rs. 5 million. It is important to note that the income amount should be calculated before factoring in the deductions permitted under sections 80c to 80u and other exemptions under section 10.
- All registered companies that generate income, regardless of whether they have made any profit during the year or not.
- Those who wish to claim refund on additional tax deduction/income tax paid by them.
- Persons who have assets or institutions of financial interest located outside India.
- Foreign companies that avail of the treaty on transactions made in India.
- NRIS who earn or earn more than Rs. 2.5 lakh in India in a financial year.
Documents Required to Fill It
It is important to keep all relevant documents in check before starting your e-filing process.
- Bank and Post office savings account passbook, PPF account passbook.
- Pay Slip.
- Aadhaar Card, Pan Card.
Form-16- TDS Certificate issued to you by your employer to provide details of the salary paid to you and the TDS deducted thereon, if any, certificate of interest from banks and post offices Form-16A, if TDS is deducted on payments other than salary such as interest received from fixed deposits, recurring deposits, etc., form-16B from the buyer if you have sold a property in excess of the limit specified as per the current tax laws, denotes the TDS deducted on the amount paid to you Form-16C from your tenant, to provide details of the TDS deducted on rent received by you, |
Form 26AS – Your consolidated annual tax statement. It contains all the information about the taxes deposited against your PAN
- TDSB deducted by your employer.
- TDSC deducted by banks.
- TDS deducted by any other organization from the payment made to you.
How to Link Aadhaar With Income Tax Return?
It is mandatory for each individual taxpayer to provide his Aadhaar number while filing tax returns. He is also required to link his PAN (Permanent Account Number) card with his Aadhaar number. Unless the Aadhaar number is cited, no one can file tax returns digitally or manually. Senior citizens can file their tax return manually but those below the age of 80 years will have to file it electronically.
To Link Your Aadhaar Number To Your Income Tax Return
- Type or write the number in the additional space given in the new ITR form provided in the income tax website.
- If you have applied for the Aadhaar number but have not received it, you can use the 28-digit enrolment id.
- The Aadhaar number is automatically filled in the itr form if it has been added electronically earlier.
Importance of e-filing
Electronic filing or e-filing is a process that involves submitting tax returns over the internet. this is done using a tax preparation software that has been pre-approved by the income tax department of india.
There are many benefits of e-filing that have made the online system of tax payment increasingly popular. The taxpayer has the freedom to file a tax return from his home, at any convenient time, during a specific period in a financial year.
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