income tax india

 What do you mean by Income tax? 

Income tax refers to a levy imposed on the earnings or profits accrued by individuals or entities within a designated jurisdiction. This tax is classified as a direct tax, as it is assessed directly on the taxpayer's income rather than on the sale of goods or services.

Key points:

Taxable Income:- The calculation of income tax is based on the taxable income of the individual or entity, which may encompass wages, salaries, business profits, investment returns, and capital gains.

Tax Rates:-  The rates of taxation differ according to the income level and the classification of the taxpayer. Progressive tax systems, such as that of India, impose higher rates on elevated income tax. 

Tax Laws: The regulations governing income tax are unique to each country or jurisdiction. In India, the Income Tax Act of 1961 regulates the income tax framework.

Tax Returns: Taxpayers must submit annual income tax returns, detailing their income and determining their tax obligations. 

Additional Considerations

Deductions and Exemptions: Tax regulations frequently allow for various deductions and exemptions that can lower taxable income, including deductions for specific expenses or investments.

Tax Planning: Both individuals and businesses may adopt tax planning strategies to reduce their tax liabilities while remaining compliant with legal standards. 

Income Tax Slabs in India (FY 2023-24)

In India, income tax is imposed according to a taxpayer’s earnings, with varying slabs for individuals, senior citizens, and corporations. According to the most recent tax system, taxpayers have the option to select either the Old Tax Regime or the New Tax Regime established in Budget 2020. Here are the specifics of both systems: 

New Tax Regime ( Updated Tax system)

The updated tax system includes reduced tax rates but removes the majority of exemptions and deductions. 

Tax in New Regime

| Income (₹) | Tax Percentage (%) | 

| As much as 3,00,000 | None | 

| 3,00,001 - 6,00,000 | 5 percent | 

| 6,00,001 - 9,00,000 | 10 percent | 

| 9,00,001 - 12,00,000 | 15 percent | 

| 12,00,001 - 15,00,000 | 20% | 

| Over 15,00,000 | 30% | 

Main Features

Section 87 A Rebate: Individuals with an income of up to ₹7 lakh receive a rebate, resulting in no effective tax liability. 

Standard Deduction: A deduction of ₹50,000 is permitted under this regime. 

Old Tax Regime

In the previous system, taxpayers are able to claim deductions like 80C, 80D, HRA, and others.

Tax in Old Regime

| Income (₹) | Tax Percentage (%) | 

| Up to 2,50,000 | None | 

| 2,50,001 - 5,00,000 | 5 percent | 

| 5,00,001 - 10,00,000 | 20 percent | 

| Greater than 10,00,000 | 30% | 

Tax rate for senior citizens (60-80) :

The exemption threshold under the previous system is ₹3 lakh. 

Tax rate for super senior citizens (Above 80) :

The exemption threshold is ₹5 lakh

CONCLUSION: 

According to our income choose the tax regime. If taxpayers have enough deduction for income tax filling choose old tax regime. Taxpayer have no deduction choose New tax regime