Paying tax is an integral part of every citizen of the country because it helps in uplifting every section of the country by providing better services in return. Depend on the type of tax, there are various methods to collect it or pay it. Before we jump to how to file taxes, let us first understand what are the different types of taxes. Do you know How to file taxes ? in this article will show you the ways you file for your taxes.
Direct Taxes: Tax which we pay directly to the Government example: Income Tax, Wealth Tax, Capital Gain Tax, Security Transaction Tax (STT), Corporate Tax, etc
Indirect Taxes: Tax which is based on consumptions and applied to goods and services bought or sold. Examples: GST, Custom / Excise Duty, VAT, etc.
What is income Tax
The most common type of tax that all the eligible citizen of India has to pay to the government. So, a Part of annual income over and above threshold limit and after considering various exemptions and deductions. Anyways, before computing the eligible amount for income tax, one should understand and compute the following data points :
- Income from Salary (Fixed, DA, Annuity, Allowances, etc)
- Earnings from business and Professions
- Property and real estate income
- Income from other sources
- Interest Income
The various exemption provided by Government are as follows :
- Standard Exemptions
- HRA Exemptions
III. Section 80 C, 80 CCD, 80 D
After considering both the above points, one needs to compute total taxable income and see to which category he belongs. Various categories defined for income tax are :
- Up to Rs : 2,50,000/-
- Rs. 2,50,001 – Rs. 5,00,000/-
- Rs. 5,00,001 – Rs. 10,00,000/-
- Above 10,00,0000
Tax percentage & Tax Slab also varies from Individual (below the age of 60) to Senior Citizen (Between 60 to 79 years) to Very Senior Citizen (80 years plus). Senior citizens will have some benefits on Tax percentage over individuals.
Income Tax Return (ITR) to be filled and submitted annually for all the eligible customers online (www.incometaxindiaefiling.gov.in) or offline by downloading and filling up applicable ITR Form and submit in XML format. Following points to be considered/updated while filing the return:
- Residence City Type (Metro or Non-Metro)
iii. Residence Type (Self-owned or Rented)
- Total Rent Paid (if applicable)
- Salary Details
- Income from various other sources as mentioned above
- Deduction as mentioned above
vii. Tax Deducted at Source (TDS)
In case of excess TDS deduction, you can claim the same for a refund while filing the Income Tax Return.
What is TDS?
Tax Deducted at Source (TDS) – Most common way of deducting and collecting tax from salaried employees (mainly) and paying it to the government at a specific period. Other than salary, even Interest Income from Fixed Deposit can also fall under TDS and individuals can claim a refund of such TDS during ITR in case it is meeting the regulatory requirements.
What is GST Return and how to file it?
It is an official document that furnishes tax paid on purchases, and tax collected on sales-related details is called the GST returns. Goods and Services Tax (GST) must be filed by all the companies/business entities registered with the GST system. Based on the Nature of the Business, the filing process needs to be selected. So, all business entities which are part of the GST system, need to file 2 returns monthly and 1 return on an annual basis. https://www.gst.gov.in/ this is the website of the online GST portal just log in to it using your registered credentials.
Under this new GST Regime, filing GST tax returns has become seamlessly automated. GST returns can be filed online, using the Software or Application provided by Goods and Service Tax Network (GSTN) which will auto-populate all the required details on each GSTR form.
A GST returns can be filed using different forms – depend on the type of transaction as well as registration of the taxpayer. There are 15 such GSTR available with various fixed due dates and timelines.
What is the VAT and VAT Return process?
Value Added Tax (VAT) is to be paid by all enterprises with an annual turnover of Rs. 5 lakh or more. To do so, one must apply for a VAT registration, which takes around 20 to 40 days for approval. Once, after the successful approval, one can make either e-payment online for the amount collected or e-file VAT returns on the Commercial Taxes website for your state.
Depending on turnover or the state, one must file the VAT returns at least once every month or in the quarter.
There are a few checks that need to be kept in mind before you decide for filing online VAT returns.
These are the preconditions for the VAT e – Filing system. Viz: Tax Identification Number (TIN), Login Details, e-Filling Software, VAT Receipts. After uploading & updating all the details, XML files to be generated and uploaded in the portal.
How to file Excise Returns?
An Excise Duty is one the Indirect Tax which is p on the sale of the particular goods. Since the government is not applying the tax straightforward, there will be an intermediary, which is either the merchant/seller or the producer who pays the tax to the government directly. Since this tax added to prices for the goods, the merchant will increase up the original price to recover the tax.
As per a new approach or program, the Merchant / Producer can file the return online which is termed as E-filing of Excise Tax Returns. In India, the government has established an Automation of Central Excise and Service Tax (ACES) which gives an ease to pay tax online and conveniently. Before filing the return or form, one needs to go through the various returns under excise control. This will help you and give you an idea about the types of forms of returns.
While filing the Excise Return, one needs to register themselves with ACSE. After filling up the form, you will get the user name and password on the registered email address. After completing A – 1, A – 2, A – 3 forms, the commissioner approves your registration and you will get the RC (just like during vehicle’s registration). RC contains 15 digit code or numbers consist of first 10 digits of your PAN, 11 & 12 is excise manufacture number and rest are System genera unique alphanumeric code. During the online return, provide the correct information or details and submit – This will the paid excise duty challan and one can be done with filing it.
What is Security Transaction Tax (STT) and how to pay it?
STT is the security transaction tax that applies during the process of Equity trading/transactions. This came into existence in the year 2004 aiming to ensure the profit or gain arising out of the sale of equity securities, for taxation or collection at source. Hence, it will ensure no one misses out on the Capital Gain Tax.
As per the Securities Contract (Regulation) Act, STT is applicable for:
Shares or Stocks, Bonds & Debentures, Other marketable securities with similar nature of any incorporated company or other corporate body.
All the Security receipts are defined in section 2(zg) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
All the Government securities with equity nature only.
Mutual funds with Equity orientations
Security Transaction Tax is not applicable for any of the off-market transactions. The Rate of STT may vary from 0.017% – 0.1%. The due date for completing or depositing the STT amount collected by the 7th of every following month.
What is custom Duty and how does it work?
When we transfer goods or purchase them from different countries or transport outside borders, one needs to pay Customs Duty on those products or goods. The main purpose of imposing the custom duty to these international products is to safeguard Nation’s Economy, Jobs by regulating and keeping eye on the movement of these goods as well as prohibiting and restricting goods too.
According to the Indian taxation rules, here are the types of customs duties – Basic Custom Duty, Special or Additional Custom Duty, Countervailing Duty, Protective Duty, Anti – Dumping Duty, and Education cess on Custom Duty.
Thus, one can calculate or determine custom duty as per the rules mentioned in the customs valuation of the goods and products.
To pay the Customs duty, one needs to Login with his registered details into the E – Payment portal of ICEGATE. Choose all or select the E – Challan under your name and then the page will redirect you to the payment gateway. Once, after successful payment, take a copy of the invoice. The recent change in the Basic Customs duty varies from 5 % to 25%.
So, this was sufficient information and essential details about how to file taxes. Why still wait? File your taxes in time and make your contribution to the development of the country.