Income tax was introduced in 1860 and the income tax act was passed in 1961, the laws and rules related to the income tax act have been modified from time to time according to the situation and requirements of the economy of the country. In India, the income tax is categorized as direct tax and indirect tax.
Direct tax –it is a text that you pay on your income directly to the government and this tax is divided into two categories which are income tax and corporate tax.
- An individual or a Hindu undivided family is taxable for income tax for any taxpayer other than the companies this is to be paid on the income received and it should be paid according to, the law prescribes the rate at which income should be taxed.
- Corporate tax is a tag that the companies have to pay on the prophet they make in theirbusinesses.
Indirect tax – this tax is collected on your behalf by somebody else and pays to the government for example theatres, e-commerce websites, and restaurants.
The income tax is calculated by the income tax calculator and an attack which is deducted or needs to be written is calculated by the tax return calculator.
How to calculate tax refund estimate
The refund is calculated by subtracting the federal income taxes from the total income taxes that are due for a year, in this case, you will receive a refund If the amount withheld from the paycheck of your taxes exceeds the amount you owe.
So, this was the way by which you can calculate tax refund estimate. Now let’s discuss something about income.
Any sum that is received regularly with a defined light source is called income. The storm is not has been defined in the income tax act 1961 but it is very important for a person to understand the meaning of income, the term income includes profits and gains, voluntary contributions, dividend, allowances, prerequisites and profit, capital gains, the profit of profession or business, winning bonus on lotteries, remuneration or interest, salary, commission, etc. There are many sections under which all the sources are mentioned.
There are also many important features of income and they are as follows:
- A personal gift is not an income.
- Income and legally or illegally remains income and it is textured according to the provisions of the income tax act.
- Income can be received in cash or any other form.
- It is very important that the income must come from outside there should be some mutual activities where a mutual concern is liable.
- The domestic expenditure on saving is not a concern as income.
Conclusion
it is very important for a person to be aware of the term income before understanding income tax. Today, it is very easy to calculate the income with the help of a tax calculator available online, and also a person needs to calculate the income so that the person can deduct some amount from the text that he or she has to pay.
