Income Tax

What is Income Tax?

Income Tax is charged by the government on any income shown by people or corporations during the past financial year. This amount is further used by the government for development within the country, whether it be infrastructural, healthcare related, educational, or any other welfare programs initiated by the government. It is a direct tax which is calculated based on the income slab rates in effect.

Why hire a consultant?

Calculation of Income Tax is a complicated procedure with multiple rules and regulations as well as intricacies involved. Errors with its calculation can result in hefty penalties, too. A consultant can help ease you into the process of Income Tax Filing and minimize your tax liability throughout the year. Although anyone can file their own ITR, it takes the relevant knowledge and patience to go through each and every required document. It is important that the filing is done while being aware of the eligible exemptions, meaning those that are available to you for your specific sources of income as well as those effective over your total income. 

Who qualifies for filing an income tax return?

Every individual or Hindu Undivided Family (HUF) must file an income tax return if their total income surpasses the basic exemption limit, regardless of any specified exemptions or deductions.

In the case of a resident and ordinary resident in India, it is mandatory to file an income tax return, even if the income does not exceed the maximum exemption limit, if any of the following conditions apply:

1. They are the beneficial owner of any asset, including financial interests in entities, located outside India.
2. They have signing authority in any overseas account.
3. They are a beneficiary of any asset, including financial interests in entities, located outside India.
4. They deposit more than INR 1 crore in one or more current accounts maintained with a banking company or a co-operative bank.
5. They incur foreign travel expenses exceeding INR 2 lakh, either for themselves or on behalf of another person.
6. Their electricity bill exceeds INR 1 lakh during the year.

For taxpayers such as companies, partnership firms, and local authorities, there is no basic exemption limit for filing an income tax return. It is mandatory for these entities to file an income tax return for every financial year.