| Income Heads | Nature of Income covered |
|---|---|
| From Salary | Salaried income individuals earn |
| Other Sources | Income from interest earned on saving and fixed accounts, winning lotteries and prize money. |
| Income From House Property | If the house is given on rent, you need to pay tax on rental income |
| Businesses And Other Professions | Businesses and freelancers need to pay taxes on their profits earned |
| From Capital Gains | Income on profits from the sale of capital assets |
Individuals are taxes based on their income. This means the higher they earn, the higher they need to pay the income tax. The Income Tax Department categorizes these levels of income tax, known as ‘Tax Slabs’ in India. These tax slabs distinguish the level of income and the tax rates accordingly. The following table will help you get further insight into these tax slabs:
| Income Level | Tax Rate |
|---|---|
| Less than or up to Rs. 2.5 lakhs | Exempted |
| More than Rs. 2.5 lakhs but less than Rs. 5 lakhs | 5% on exceeding amount to Rs. 2.5 lakhs |
| More than Rs. 5 lakhs but less than Rs. 10 lakhs | Rs. 12,500+20% on amount exceeding Rs. 5 lakhs |
| More than Rs. 10 lakhs | Rs. 1,12,500+30% on amount exceeding Rs. 10 lakhs |
The following are the procedures to obtain a Digital Signature Certificate:
| Income Level | Tax Rate |
|---|---|
| Less than or up to Rs. 2.5 lakhs | Exempted |
| More than Rs. 2.5 lakhs but less than Rs. 5 lakhs | 5% on exceeding amount to Rs. 2.5 lakhs |
| More than Rs. 5 lakhs but less than Rs. 10 lakhs | Rs. 12,500+20% on amount exceeding Rs. 5 lakhs |
| More than Rs. 10 lakhs | Rs. 1,12,500+30% on amount exceeding Rs. 10 lakhs |
However, the Income Tax Department does not subject income tax only based on income. There are certain exceptions. One of those exceptions is Capital Gain Taxes. Capital gain is based on the time an individual owns a specific asset. This time determines whether the asset is long term or short term. Then, the tax rates differ with different periods.
| Type of Capital Asset | Holding Period | Tax Rate |
| House Property | The time period for more than 2 years- long term The time period for less than 2 years- short term | 20% depends on the slab rate |
| Equity Mutual Funds | The time period for more than 1 year- long term The time period for less than 1 year- short term | Exempt(until March 31st 2018) Capital gains more than Rs. 1 lakh subjected to tax @10%, 15% |
| Debts Mutual Funds | The time period for more than 3 years- long term The time period for less than 3 years- short term | 20% depends on the slab rate |
| Shares (STT paid) | The time period for more than 1 year- long term The time period for less than 1 year- short term | Exempt(until March 31st 2018) Capital gains more than Rs. 1 lakh subjected to tax @10%, 15% |
| Shares (STT unpaid) | The time period for more than 1 year- long term The time period for less than 1 year- short term | 20% depends on the slab rate |
| Fixed Maturity Plans | The time period for more than 3 years- long term The time period for less than 3 years- short term | 20% depends on the slab rate |
No, you need not attach any kind of documents are ITR forms do not require them. But you need to present them if asked to do so.
Yes, you need to pay income tax on pension just like any other income. However, a pension from the United Nations is exempted.
You can take help from the Public Relation Officer of the Income-Tax Department in your city. You can also take help from any tax professional, Like We.
They do not subject gifts from relatives to taxes. However, under tax rules, friends are not a relative, therefore, gifts from them are liable under taxes.
The excess tax will only be refunded if you file an income tax return. Then, it is directly credited to your account.
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