Everything You Need To Know About Filing Taxes

Tax is a  financial compulsion imposed by the governmental organization to fund various kinds of government expenditures in multiple sectors such as education, public health and other important community services in the interest of the people.

Taxes in India are of two types, Direct and Indirect taxes. Direct taxes are imposed on people’s income whereas Indirect taxes are imposed on people’s expenses.

For individual taxpayers, the most important type of tax is income tax.

As per Income Tax Act,1961 the law obliges the citizens to pay the taxes yearly within the given date by the government of India if the annual income falls below the minimum income margin. Income tax applies to the income of an individual.

Types of Income Tax:

There are different types of taxes that fulfil the direct tax, i.e,

1. Corporate tax
2. Capital gain tax

While the indirect taxes include:

1. Service tax
2. Custom duty
3. Entertainment tax
4. Stamp duty
5. Securities Transaction Tax
6. Indian excise tax

These taxes were replaced by Goods and Services Tax (GST) in 2016.

Each financial year includes 12 months starting from 1st April of each year and ending on 31st March of the next year.

Tax should be paid on the total income of a person from all the sources of his income. An employer can decide the total income of an employee and hence the taxable amount.

Here Are Steps To File Your Income Tax :

1. The first step towards filling your income tax is to Collect All The Required Documents which includes all your capital statements.
2. Get your Annual Information Statement (AIS) which explains different financial transactions made by a person during an entire financial year.
3. Calculate total income chargeable income in the form of tax for a whole financial year.
4. After paying the taxes, File an income tax return to file any refund from the income tax department.
5. Verification of income tax department.

Things To Keep In Mind While Filing Income Tax Return

1. Make sure you fill out the correct tax form
2. Fill in the correct information in the form
3. Present your residential proof
4. keep all the valid documents ready

Tax filing can be done with ease by keeping the above points in mind. For any query or consultation contact inside tax.