Income tax India is imposed by the government of India on individuals who fall within the range of taxable income. The Central Board of Direct Taxes (CBDT) is the governing body of the Income Tax Department in India.This department is a division of the Department of Revenue of the Ministry of Finance.
The people and concerns that are coming under the domain of income tax India are as follows:
Hindu Undivided Families (HUF)
Income tax in India is imposed on five types of income.
The types of income that can be taxed are as follows:
Income accrued from salary and wages
Income got from business and other professions
Income from house property
Capital gains producing income
Income that is generated as salary is liable to be taxed if it comes under the range of taxable income. In case of income tax on house property, the Annual Value is taken into consideration. Income from capital gains is the income obtained from the sale of capital assets. There are both long and short-term capital gains and they are taxed accordingly.
The dividends that are paid by Mutual Funds and Companies are exempted from tax. This is because the companies already pay 15% dividend distribution tax before distributing the dividends amongst the shareholders. This dividend distribution tax is however not payable by Equity Mutual Funds. The money acquired from the proceeds of insurance policy is also not taxable.
The current income tax rates in India are as follows:
Up to 1,10,000 – Nil
Up to 1,45,000 (for women) – Nil
Up to 1,95,000 (for resident individual of 65 years or above) – Nil
1,10,000 – 1,50,000 – 10%
1,50,001 – 2,50,000 – 20%
2,50,001 – 1,000,000 – 30%
1,000,001 upwards – 30% (when the total income is in excess of Rs. 1,000,000 a surcharge of 10% is applicable on the total tax liability.)
For Indian companies, the income tax rate is 30% while foreign companies pay 40% income tax. An education cess of 3% is further imposed on both of them. Fringe benefit tax is payable at 33.99% of the benefit.
Last Updated on : 5th July 2013