Income tax is the tax imposed by the government on its citizens as a part of their income. The individual or entity has to pay a particular amount of money every year as a tax to the government on their income or profit.
WHY SHOULD WE PAY THE TAX TO GOVERNMENT
everywhere in the world, it's very important to pay income taxes. Using this tax money the government will construct airports, schools, hospitals, etc to fulfill all the social needs of the country. The government uses this tax money for the development of the country.
HOW INCOME TAX IS CALCULATED
In 2014, a person whose income is above 2 lakhs had to pay a particular percentage of tax. But now it is reduced to a particular interest. Income tax is calculated by taking your expenses for the financial year 2023 and lending the tax on the financial year 2024.
HOW TO REDUCE TAX
Make your It card, it is a proof of identification. It will help you during traveling while taking home loans, etc.
BENEFITS OF PAYING TAX
- CESS - Contributes to health and education purposes in 4%.
- paying taxes helps us for health and education purposes. It contributes up to 4%.
- If we are paying taxes then we will have every right to question the government and many more opportunities.
CATEGORIES OF INCOME
- If you are working in a company and you will get a particular amount of salary
- Profession ( Doctor, engineer, etc)
- Self-employed
- Housing property ( commercial complex )
- Capital Ains ( invested in mutual funds or other sources of income)
TIPS TO SAVE TAXES
Calculating according to all these categories, the government will show your rate of interest.
If your income is in a particular amount and below the income there are statutory deductions. After that according to the Income Tax Act of section 80C, you don't have to pay any kind of tax until your income exceeds up to 1 lakh. Here is the insurance premium that you have paid, your contribution to the provident fund, your home loan, your children's tuition fees, your mutual fund everything you can claim through section 80C.
- Under section 80C, by claiming a home loan, tuition fees of your children, Mutual funds, life insurance premium, or provident fund you can get a particular amount of exception.
- Under section 80D, there comes the health insurance premium. Under the first category, there comes you, your wife, and your children. And your parents come under the second category. Claim this insurance under section 80D, you can claim up to Rs. 25000 per year. So under health insurance, you can get exceptions up to Rs.50000 to Rs. 60000.
- section under 80DD, If you find spending too much on illness and if you are under the age limit of 30 to 40 years then you can claim up to Rs. 40000 and if your age limit is 40 to 60 years then you can claim up to Rs. 60000. If you are under the age Limit of 60 to 80 years then you can claim up to Rs. 80000.
- Under section 80E you can claim through interest on an education loan.
- Under section 80G, You can get exceptions through your donations. Here you can claim up to Rs 1 lakh.
- Under section 80GG, claim tax deduction on rent.
After calculating through all these sections you will get a particular picture of your tax.
CONCLUSION
income tax is the main purpose of national growth. If you are capable of paying income tax then you should complete your responsibility
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