Tax on income, is a term which sent shivers throughout the body of a taxpayer at the end of every financial year.
Amount of the tax to be paid varies not only according to the taxpayer’s total income he/she earns in a year, but also if the taxpayer is a male, female, physically challenged or senior citizen. When it comes to paying income tax everyone tries finding a solution to pay the least and getting an income tax relief.
Though, income tax money used for nation development, at the time of natural disasters and wars is something which can’t be given a miss, but at least one can lower it down to some extent. First and foremost thing, one needs to know if the income earned by him/her is a taxable income or not.
Given underneath is a list depicting taxable incomes.
Working for an organization as an employee, meaning you get a fixed monthly salary and various other kinds of allowances. After certain period, an increment is given while during a special event bonus is added to the salary. So, how much do you earn in a year? This thing matters the most as then, you need to find the income bracket where the yearly earnings of yours locates. Interest rate of a particular income slab where yearly earnings is positioned decides the amount you’re going to pay.
Running a business? You need to keep a check on your monthly or quarterly earnings. A safe record at the year end will help you know about the total income and interest at which tax will be filed. The tax structure for the proprietors and those running businesses in partnership are different. Make sure before filing tax what kind of business you’re in and then, pay accordingly.
Also Read: What to do, if you have defaulted on your IRS installment agreement?
This thing is equated with capital gain. You’re required to make government known the details related to selling of homes, lands or any personal property while filling in the tax form.
Being a senior doesn’t say, you’re out from the income tax reach. It means the total income you’re earning, be it monthly pension, money received at the yearend, rollovers from any of your retirement plans or any other grant given under a particular scheme will be taxable amount. In case your total annual amount crosses the minimum income bar beyond which tax will be deducted then, you’ve to be a taxpayer.
Whenever you rent a shop or home either on monthly or yearly basis, you’re bound to show monthly or yearly income out of these income generating sources.
It is a widely considered misconception- a person doing private or home based work automatically gets shielded against tax. However, this is not a reality. Whether you’re into freelancing, teaching somebody at home and doing any kind of home based or private work doesn’t impart immunity against filing tax. As any income earned from private venture is a taxable amount.
Other sources of income can be so many. Cash and income you make through bank accounts come under taxable incomes. Any kind of work income can be generated from can be gambling, fellowship grants, farming incomes, earning for clergy, unemployment funding, and earning from the stock market are under the domain of income tax.
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