All you need to know about filing taxes and going about it is like a pro.
Have you ever sat blankly in front of an open income tax form and wondered why you weren't taught about it in school? Well, there is a first for everyone. We sometimes wish there was a swap of Pythagoras and Calculus and the things that actually haunt us later in life we're taught to us at school lever. Well, it's never too late! Paying income tax is always a milestone in any citizens life, and so that you are not clueless the next time you fill in the form, here is all you need to know.
Definition Of Previous Year-
The financial year or tax year is 12 years beginning from April 1st and ends on March 31st. Whenever you start your job, the tax year closes on March 31st and begins on April 1st. Therefore, it is crucial to plan your taxes for each financial year.
Assessment Year-
Assessment year comes after the previous year in which you will assess and file your returns. For example, if you start your job on January 1st, the tax closed on March 31st 2019. The previous year 2018-19 is your previous year, and 2019-20 is your assessment year. The last day to file a return is August 31st.
Understanding Your Salary-
When you start your job, reach out to the payroll or HR department to get the salary details. You will get the significant components of your salary and how much tax will be deducted from it based on them.
The Payable Tax On Income-
Besides the salary, you receive you may earn from several other sources. The total income is the sum of all heads of income. Be it house property, business or capital gain.
Deductions-
Deductions reduce gross income. These are amounts that the income tax department allows to reduce your income and bring down the tax liability. The more you make use of deductions, the lower your tax gets.
Section 80C Is Your Best Friend-
Section 80C takes off about 150000 from your gross income. Public provident funds allow you to put from 500 to 150000 in a year. It is a safe saving avenue to park your hard-earned money. It can be easily opened through a bank.
