Started thinking about your taxes yet? As the financial year nears its end, you may need to review your tax burden and tax-saving investments. Here’s a guide to walk you through the basics of income tax.
Types of taxes
In India, citizens are liable to pay direct and indirect taxes. Here’s how they differ:
- Direct taxes: This is applied to one’s earnings, and the tax is paid directly to the
government. While individuals, Hindu Undivided Families (HUFs), and other
non-company taxpayers pay income
tax, company earnings are subject to corporate tax.
- Indirect taxes: The Goods and Services Tax (GST) is a form of indirect tax. Here, the seller of a good or service charges tax from the buyer and pays it to the government.
Important income tax dates
- Submit tax-saving investment and expenditure proofs: 31 January
- Complete tax-saving investments and expenditure: 31 March
- File income tax returns: 31 July
- Verify income tax returns: October–November
Types of income
Make sure to declare all your income sources when filing income tax returns. These include:
- Income from salary: This covers salary and pension earnings.
- Income from other sources: This covers various types of income, including interest on savings bank accounts or fixed deposits, winnings from a prize or lottery, among others.
- Income from house property: This covers rental income from a house that you own.
- Income from capital gains: This covers profits made by selling capital assets like an apartment, shares, or mutual fund units.
- Income from business or profession: This covers