A Glance Into Income Tax Rules And Service Tax In India

By Author: Suzane Morgan
Total Articles: 4
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Every country has its own set of income tax rules. Income tax refers to the tax that is levied on personal income of a person. Government of a country utilizes the collected taxes on personal income of individuals for offering free services, beginning from healthcare, common infrastructure, to education, security, etc. The calculations of income tax are based on the earnings of an individual. Income tax is just a proportion of the income earned by citizens. Government has mandated individuals to pay income tax based on certain rules and regulations. Individuals have to pay income tax, irrespective of full-time or part-time job. Income tax is even levied on bonus received and also commission and tips. It is charged on profits received from business, dividends received on shares, rent received on properties, interest received on bank deposit, etc.

According to the income tax rules
, income tax is not charged on grants or loans given to students, on scholarships for education, awards received for research, allowances ...
... received from spouse or parents, grants received, etc. Indian Finance Minister recently increased the limit for exemption from 1,80,000 to 2,00,000. In addition, the tax slab is extended to 10 lakhs for 20%. However, the exemption limit for senior citizens remains the same. Post implementing the limits, the maximum benefit for females below 60 years of age is 21,630. The same benefit for males who are below 60 years has become 22,660, while for senior citizens it is 20, 600. Individuals can calculate their tax on tax calculators available on many sites online. The rates for Service Taxas changed in the budget of 2012 have considerably increased from 12% to 12.36%.

Service Taxis charged on services offered on payment. For instance, a person stays in a hotel, and then the total payment offered is slightly more than the actual. The difference is the service tax to be paid by the customers for service received. Like excise duty is charged on goods, in the same way, service tax is charged on services. Introduced in the year 1994 in India, service tax is to be paid by all service providers. However, service providers in Jammu & Kashmir do not have pay service tax. Individuals or companies need to deposit service tax on either monthly or quarterly basis. People can deposit the calculated service tax to the concerned bank. With the advancement in technology, service tax can also be paid online. A particular procedure has to be followed while paying service tax.

The date of paying service tax and income tax is announced in public through newspapers, television, and radio. The date for paying taxes is fixed and not flexible. If income tax or service tax is not paid on time, then Government charges penalty on the defaulters based on rules and regulations.