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Scheme of Income Tax Return in India

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Scheme of Income Tax Return in India

Income Tax Return in India




India is a one of the fastest growing economies of the world and requires lot of funding for meeting its infrastructure development, defense and other social development requirement. Direct taxes and indirect taxes are major sources of revenue of Indian Government and Income Tax Return in India is one of the means through which collection of direct taxes are monitored by the government for meeting its various development requirement.

 

Who are required to File Income Tax Return in India?

 

As per the domestic law in India, every person who has taxable income in excess of basic exemption limits are required to file Income Tax Return in India. Also, the present basic exemption limit is Rs.2.5 lac. Further, besides aforesaid income criteria, certain people are also required to file their Income Tax Return in India although their income has not exceeded the basic exemption limit as mentioned above like in case of electricity consumption of more than Rs.1 lac or in case of foreign tours undertaken during the year.

 

Whether Nonresident Indians are also required to file Income Tax Return in India?

 

Yes, even the Non Resident Indians are required to file their Income tax return in India in case they have taxable income in India. It may be noted that unlike residents, who need to file their income tax return relating to global income i.e. whether income earned in India or abroad, in case of Nonresidents, only income earned in India are taxable and not the income earned outside India.

 

What is the composition of Income Tax Return in India?


Income tax return or ITR generally comprises of details of incomes earned under various heads of income by any person whether an individual or a company.


Normally, in India, the following types of incomes are required to be reported:

 

a)     Income from Salaries

b)     Income from House property

c)     Income from capital gains

d)    Income from Business and Profession

e)     Income from Other sources


What are the tax rates applicable for different types of persons?


Normally, different types of tax rates are prescribed for different types of persons in India like

 

1)     An individual or HUF is taxed at 5% to 30% depending upon amount of income earned during the year.

2)     Domestic companies are taxed at 15%/22% and 25% depending upon nature of business and options chosen by them.

3)     Limited Liability Partnerships are taxed at 30%

4)     Foreign companies are taxed at 40%

5)     AOP/NGOs etc. are taxed at 30%

 

Besides above, education cess @ 4% and surcharge at different rates are also applicable on total tax computed as above.

 

It may be noted that filing of Income Tax Return in India is a complex procedure for each type of tax assesses and involves interpretation of various provisions of income tax act in India, accordingly, it is advisable to take assistance of some tax experts who will guide in professional manner and ensure that you have a hassle free experience of tax return filing in India and to avoid unnecessary notices and inquiries from the tax department.

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