Shutterstock.com- What is an income-tax tax slab?
Tax laws divide taxpayers into different grouping as per their taxable income and levy income-tax at different rates. These grouping are called income-tax slabs. Basic tax exemption limit for an individual depends on her age and residential status. For instance, if one is below 60 years and has an income up to Rs 2.50 lakh, then there is no income-tax obligation currently, as individuals with taxable income up to Rs 2.50 lakh are exempt from income-tax. Currently, there are about six income-tax slabs as per the tax laws notified post Budget 2019. Accordingly, the income-tax rate is zero for incomes up to Rs 2.5 lakh, 5 per cent (plus 4 per cent cess) for incomes between Rs 2.5 lakh and Rs 5 lakh, 20 per cent (plus 4 per cent cess) for incomes from Rs 5 lakk to Rs 10 lakh, 30 per cent (plus 4 per cent cess) for incomes ranging from Rs 10 lakh to Rs 50 lakh, 30 per cent plus 10 per cent surcharge and 4 per cent cess for incomes between Rs 50 lakh and Rs 1 crore and 30 per cent tax plus 15 per cent surcharge and 4 per cent cess for incomes above Rs 1 crore. - What are current income-tax rates?
Budget 2019 did not effect any change in income-tax slabs and rates. A rebate of Rs 12,500 was given to all taxpayers with taxable income up to Rs 5 lakh. This rebate was made available under Section 87A of the Income-Tax Act. Also, a standard deduction of Rs 50,000 was allowed to all taxpayers for financial year 2019-20. Accordingly, the income-tax rate is zero for incomes up to Rs 2.5 lakh, 5 per cent (plus 4 per cent cess) for incomes between Rs 2.5 lakh and Rs 5 lakh, 20 per cent (plus 4 per cent cess) for incomes from Rs 5 lakk to Rs 10 lakh, 30 per cent (plus 4 per cent cess) for incomes ranging from Rs 10 lakh to Rs 50 lakh, 30 per cent plus 10 per cent surcharge and 4 per cent cess for incomes between Rs 50 lakh and Rs 1 crore and 30 per cent tax plus 15 per cent surcharge and 4 per cent cess for incomes above Rs 1 crore. Budget 2019 also allowed 100% tax rebate under Section 87(A) subject to a maximum of Rs 2,500 available to resident individual whose total income does not exceed Rs 3.5 lakh. - What is tax deduction under Section 80C
Under the Income-Tax Act, the law allows for claiming income-tax rebate on specified amounts invested in certain instruments or spent for certain specified purposes or paid towards repayment of home loan. This is aimed at helping individuals to reduce their tax burden. Deductions allowed under Section 80C of the Income-Tax Act for individuals and HUFs is capped at Rs 1,50,000 as of last Budget. The investment and expenditure that qualify for such deductions include premium paid towards life insurance, investments made in ELSS of mutual funds, Ulip, specific bank FDs, NSC, PPF, principal amount paid towards repayment of home loans etc. - What is TDS
TDS stands for tax deduction at source. Any company or person making a payment is required to deduct tax at source, if the payment exceeds certain threshold limits, according to the Income Tax Act. TDS has to be deducted at the rates prescribed by the tax department and paid to the tax department. - What is import duty?
Import duty is a levy collected by a country on import of foreign goods. It is levied for two basic purposes — to generate income for the government and to protect the local manufacturer and producers of those goods against cheaper goods shipped in from outside the country. - What is customs duty?
Customs Duty is a tax imposed on imports and exports of goods. It is levied on the import and export of goods across international borders. It is also used to regulate the movement of goods. This levy can be of different types, 1. Basic Customs duty; 2. Additional Customs duty; 3. True Countervailing duty or additional duty of customs; 4. Anti-dumping duty/Safeguard duty. While revenue is a paramount consideration, Customs duties may also be levied to protect the domestic industry from foreign competition.
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