Income Tax is a tax imposed by the government of India on every one who earns in India whether they are resident of India or not. If an individual stays in India for 182 days or more in a year, he is treated as resident in that year regardless of his citizenship. This tax is levied under Income tax Act which was passed by the Parliament of India. Income tax department is responsible to monitor the income tax collection. Every individual files returns on his income earned during the last year. To calculate Income tax the duration of twelve months period from 1st April to 31st March is taken into account which is called as previous year and the period in which the income tax is calculated and filled is known as assessment year as this is the time when tax is assess for the previous year. Every individual has different modes to earn income but there are few heads under which all those incomes comes which are taxable under Income tax department like Income from Salary, Income from House Property, Income from Business and Profession, Income from Capital gain, Income from Other sources. If a person has received some income in the form of gift upto Rs 25000 is exempt from the income tax. But If this amount exceeds Rs 25000 then the person who have received the amount is liable to pay the tax on the same amount unless it is received from any person who is a relative, on occasion of marriage or by inheritance. Every individual needs to file income tax return each year to the government of India.
Income Tax Return is a document or form through which every person residing in India provides all his income and tax details to the government of India. Every person residing in India need to file an income tax return if his/her income is above the basic income tax exemption limits. Filing of tax return is mandatory above such limits.This includes a salaried person, without other sources of income, and for whom tax has been deducted at source.
Taxes are collected by three means: a) voluntary payment by persons into various designated Banks. For example Advance Tax and Self Assessment Tax b) Taxes deducted at source [TDS] on your behalf from the payments receivable by you. c) Taxes collected at source [TCS] on your behalf at the time of spending. It is the constitutional obligation of every person earning income to compute his income and pay taxes correctly.
What are the Penalties for late filing of Income Tax Return? If there are no balance taxes to be paid, no interest can be levied. However, a penalty of Rs 5,000 can be imposed by the Tax Department. In case there are tax arrears, 1 per cent per month as interest on the taxes due will be levied as penalty.