Tax Collection in India
The procedure of tax collection in India has evolved over the years and is now subject to several acts, rules, and regulations, aslaid down by the Indian Income Tax department. The tax is imposed on any kind of income of an individual as an employee or a self employed, or a corporation engaged in commercial activity. The amount of taxation depends on the type of income and the person or the organization earning the income. The tax collection in India has to follow several norms specified under the Income tax act of India. The tax is calculated under different heads of income such as salary head of income, house property head of income, profit in business or profession head of income, capital gains head of income, and other sources head of income.
The tax amount also depends on the claims for rebates and exemptions under the Income tax act of India. The income tax is levied on all kinds of income and collected by the Central government of India apart from the income on agriculture which is not taxable under the Central government. The State government of India collects the tax pertaining to income from agriculture. The provisions under which the tax collection in India is performed are mentioned in the Income Tax Rules, 1962 and the Income Tax Act, 1961. The Tax and Revenue Department of the Central government of India's Ministry of Finance has the authority of legal administration pertaining to the tax collection in India.
Last Updated on June 13, 2015
Some facts under the tax collection in India
- The laws on central government income tax collection and recovery is governed by the Department of Tax and Revenue under Ministry of Finance, India
- Designated due dates are ascertained for the purpose of filing of returns
- The filing date is not extended and any late filing is charged with interest
- The returns pertaining to the losses have to be filed within the due date
- The system of taxation is completely based on the personal assessment of income
- All the large sized and medium sized taxpayers are subjugated to investigative assessment
- The tax is deducted at source by the employers on behalf of the employees and from all kinds of defrayments to non residents
- Penalties and interest are charged on the non payment of taxes and failure to file returns
Exemption schemes under the tax collection in India:
- Exemption on income spent on higher educational purpose
- Tax is exempted on income spent as contribution to provident fund, insurance policies, etc
- Exemption on income spent for the treatment of a diseased person who is dependent
- If a person is disabled and is working then his income is not taxed and he is exempted from paying it.
- Exemption on the income spent on the payment of interest on loan
- Exemption on the income spent on buying national savings certificates and investments in other government based savings schemes
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Last Updated on June 13, 2015