There are a few topics that confuse most of us. One such topic is income tax. Every website that talks about taxes explain things in non-layman terms, which makes it difficult for all of us to understand. But, don’t you worry! We’re here to answer these basic questions in a way that we millennials understand.
Basic income tax questions:
Question #1: What on earth is Income Tax?
A: If you’re making money, you’ll have to pay the government a certain amount of money. This is calculated and charged on your annual taxable income from the 1st of April till the next year’s 31st of March.
Question #2: How much tax do I owe?
A: For the 2018-19 financial year, you will be paying taxes according to the slab that you fall into. If your annual income is less than ₹2.5L, then, chill bruh! You don’t have to pay taxes. Anything between ₹2.5L to ₹5L, you’ll have to pay only 5% taxes. If your income is somewhere between ₹5L to ₹10L, your tax rate will be 20%. And, if your income is anything more than ₹10L, you fall into the slab with a 30% tax rate. Everyone might think you are rich, but only you understand the pain of paying such a huge tax amount.
Question #3: When’s the deadline to pay my taxes?
A: If you are a salaried person, the tax you owe will be deducted from your salary every month. If you are a freelancer, a business owner or someone who has other sources of income, then your deadline is the 31st of July.
Question #4: Can I ask my company not to deduct my taxes at source?
A: You can ask your company not to deduct your taxes at source by furnishing an investment declaration form that proves that you do not owe any taxes.
Question #5: Can I do all the filing and stuff online?
A: www.incometaxindiaefiling.gov.in is where you need to go to file your taxes online. It is very convenient to file your income tax online as it is processed faster than manual filing.
Question #6: What happens if I don’t pay my taxes?
A: You’ll get bombarded with legal notices from the income tax department where you’ll be asked to pay a certain amount. This amount will be higher than your tax amount because of the penalty that you’ll have to pay. If you ignore these notices… well, don’t! Be a good citizen and pay your taxes on time. This is only applicable for non-salaried people like business owners, freelancers, etc.
Question #7: How can I save taxes?
A: There are many ways to save taxes. The best way is FDs, submitting your rental agreement, etc. You can also pay health insurance premiums. Head over to websites like cleartax.com, paisabazaar.com, taxguru.in, etc. to understand the ways you can save taxes.
Question#8: Whom can I go to if I need help with tax-related matters?
A: Log onto www.incometaxindiaefiling.gov.in. You’ll get almost all the information you need. If that doesn’t answer your queries or solve your problems, you can go to tax professionals or take help from Public Relation Officer at a local office of the income tax department. Additionally, you can log into websites like cleartax.com, taxsmile.com, taxspanner.com, etc. and make the whole process of filing returns easier.
Question #9: I’m not a salaried person, I’m a freelancer. Should I also pay taxes?
A: A freelancer is an earning individual. Hence, you are bound to pay 10% tax and file your returns. Some companies that you work with might deduct the taxes and pay you but you’ll still have to pay taxes for any other income you make.
Question #10: What is ITR?
A: ITR is nothing but Income Tax Returns. Once you have paid your taxes, you need to communicate the same to the government by filing your returns. Through this process, you can also claim refunds from the IT department. This is a fairly quick and easy task that helps you save money. If you fail to file your taxes on time, you may have to pay a minimum of ₹5,000 penalty and interest. You can file your returns on www.incometaxindiaefiling.gov.in by filling out an online form.
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Also read: 8 Last-Minute Tax Saving Tips