Monday, 24 August 2015

​What is the period for which a person’s income is taken into account for the purpose of Income-tax?

Income-tax is levied on the annual income of a person. The year under the Income-tax Law is the period starting from 1st April and ending on 31st March of next calendar year. The Income-tax Law classifies the year as (1) Previous year, and (2) Assessment year.
The year in which income is earned is called as previous year and the year in which the income is charged to tax is called as assessment year.
e.g., Income earned during the period of 1st April, 2015 to 31st March, 2016 is treated as income of the previous year 2015-16. Income of the previous year 2015-16 will be charged to tax in the next year, i.e., in the assessment year 2016-17.​

6 comments:

  1. For every source of income you have to maintain proof of earning and the records specified under the Income-tax Act. In case no such records are prescribed, you should maintain reasonable records with which you can support the claim of income.

    ReplyDelete
  2. An exempt income is not charged to tax, i.e., Income-tax Law specifically grants exemption from tax to such income. Incomes which are chargeable to tax are called as taxable incomes.

    E.g., Dividend income from an Indian company is granted specific exemption and, hence, the same is not liable to tax in the hands of the shareholders. However, dividend from a foreign company is taxable.​

    ReplyDelete
  3. What does Profession mean?
    Profession means exploitation of one’s skills and knowledge independently. Profession includes vocation. Some examples are legal, medical, engineering, architecture, accountancy, technical consultancy, interior decoration, artists, writers, etc.

    ReplyDelete
  4. What does Profession mean?
    Profession means exploitation of one’s skills and knowledge independently. Profession includes vocation. Some examples are legal, medical, engineering, architecture, accountancy, technical consultancy, interior decoration, artists, writers, etc.

    ReplyDelete
  5. An exempt income is not charged to tax, i.e., Income-tax Law specifically grants exemption from tax to such income. Incomes which are chargeable to tax are called as taxable incomes.

    E.g., Dividend income from an Indian company is granted specific exemption and, hence, the same is not liable to tax in the hands of the shareholders. However, dividend from a foreign company is taxable.​

    ReplyDelete
  6. For every source of income you have to maintain proof of earning and the records specified under the Income-tax Act. In case no such records are prescribed, you should maintain reasonable records with which you can support the claim of income.

    ReplyDelete