The criteria to become tax payers in India depend upon various assessment procedures like self-assessment, re-assessment, precautionary assessment etc. However, the tax slabs updated every year through the budget, serve to decide the amount of income tax to be paid by various income groups.
Assessment Procedures for Tax Payers in India:
In case of self-assessment, the assessee decides the amount of tax himself in accordance with returns furnished by him. Re-assessment is done when the assessing officer finds during tax assessment that a specific source of income was not taken into account by mistake. Precautionary assessment serves to find out the identity of the person who has received the particular income which escaped the tax payment.
Necessary Requirements for Tax Payers in India:
The tax payers in India are required to pay taxes on their incomes earned through different sources and some of the prominent ones are:
- Dividends
- Interest on Securities
- Salaries
- Payments to Contractors
- Cash won through lotteries
- Insurance Commission
- Payment to Non-resident etc
The tax payers are required to fill in tax forms to pay their taxes. Form 16A covers most income sources mentioned above. However, Form 16 needs to be submitted in case of income from salaries and the sports associations are required to fill up form 16B for the payment of income tax.
Income Tax Payers in India:
The tax slabs published in the budget every year helps to identify people eligible to pay taxes in that respective year. The income tax structure in the current fiscal has exempted men earning less than Rs.110,000 from the burden of paying taxes and in case of women, the taxable income is beyond Rs.145,000.The tax structure has, however, made special provisions for the senior citizens of India, i.e., elderly men and women aged 65 years and above.
Senior citizens earning Rs. 195,000 and less are exempted from the burden of taxes. The tax slab is however applicable for men whose income exceeds Rs. 110,000 but is less than Rs. 150,000. The tax rate fixed for them in 2007-08 is 10% and this slab applies to women as well. Therefore, any woman who earns more than Rs.145,000 and less than Rs. 150,000 is required to bear a 10% tax rate.
For men as well as for women earning more than Rs.150,000 and less than Rs. 250,000, the tax rate is 20%. Similarly, for men and women earning more than Rs.250,000 and less than Rs. 1,000,000, the tax rate has been fixed at 30%. The tax rate beyond 1,000,000 is also 30%, but those assessees are required to pay 10% on the total liability of tax. The tax structure has also made the payment of 3% as education cess which is compulsory. This cess is calculated on the income tax liability.
Professional Tax Payers in India:
The tax payers in India are also required to pay profession tax in accordance with the professional tax slabs. The professional tax slabs in India are different for each state and the professional tax slabs of a specific state is decided by the respective state government. For example, the professional tax slabs structure of Delhi is as follows:
| Income |
Percentage of Professional Tax |
| Less than Rs.1,10,000 |
Nil |
| Between Rs.1,10,000-Rs.1,45,000 |
Nil |
| Between Rs.1,45,000-Rs.1,50,000 |
10 % |
| Between Rs.1,50,000-Rs.1,95,000 |
20 % |
| Between Rs.1,95,000-Rs.2,50,000 |
20 % |
| Beyond Rs.2,50,000 |
30 % |
The professional tax slab structure of the state of Maharashtra has been calculated as follows:
| Income |
Monthly Professional Tax |
| Less than Rs. 2500 |
Nil |
| Between Rs. 2500-3500 |
Rs.60 |
| Between Rs. 3500-5000 |
Rs.120 |
| Between Rs. 5000-10000 |
Rs.175 |
| Beyond Rs.10000 |
Rs.200 |
The professional tax slab structure followed in Tamil Nadu on a half yearly basis is formulated as follows:
| Income |
Monthly Professional Tax |
| Less than Rs.21000 |
Nil |
| Between Rs.21001-Rs.30000 |
Rs.75 |
| Between Rs..30001-Rs.45000 |
Rs.188 |
| Between Rs.45001- Rs.60000 |
Rs.390 |
| Between Rs.60001- Rs.75000 |
Rs.585 |
| Beyond Rs.75001 |
Rs.810 |
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