What is income tax in India?
What is income tax? Income tax is a type of tax that governments impose on the income generated by businesses and individuals within their jurisdiction. As per the law, the taxpayer must file an income tax return to determine his tax obligation.
How many types of tax
When it comes to taxes, there are two types of taxes in India – direct and indirect taxes. Direct taxes include income tax, gift tax, capital gain tax, etc. while indirect taxes include value added tax, service tax, goods and services tax, custom duty, etc.
What is a direct tax?
Direct taxes are levied on individuals and companies by the supreme tax authority of the country. Direct taxes are paid directly by those on whom they are levied. For example, taxpayers pay income tax, wealth tax, taxes on assets and gifts directly to the government.
What is indirect tax?
Indirect tax is the tax levied on the consumption of goods and services and it is not levied directly on the income of a person. Hence it is the tax paid along with the cost of the goods and services. Examples of indirect tax include sales tax, entertainment tax, excise duty, etc.
Who is eligible for income tax
All individuals up to the age of 59 years, whose total income for the financial year exceeds Rs 2.5 lakh. For senior citizens (aged 60-79 years), the limit increases to Rs. 3 lakh and for super senior citizens (aged 80 years and above), the limit is Rs. 5 lakh.