What is Income Tax?
An income tax is a tax that governments impose on financial income generated by all entities within their authority. Income tax in layman's term is the share of the government from the money you earn. By law, businesses and individuals must file an income tax return every year to determine whether they owe any taxes or are eligible for a tax refund.
Income Tax is tax on Income. Income Tax Act 1961 and Income Tax Rules regulate the provision of this tax. It is a direct tax and its liability cannot be shifted to anyone else. Previously, the income taxes levied on citizens in India were very high. Improper governing rules led to exploitation of poor in the form of taxes. But as the years passed by, the Income tax rates lowered.
Why is it necessary to pay Income Tax?
Income tax is a key source of funds that the government uses to fund its activities and serve the public. Here is what the government does with the money it collects from the taxes:-
There are many instances when our country is hit with disasters. Disasters come along with great amount of loss both in terms of life and property. The money collected from the taxes serve as a great help during relief operations and to get everything back to normalcy.
Our country is constantly under threat from our enemies. To protect our country from dangers, we have various trained personnel to protect our country along with some amazing machinery and technology. The salaries and benefits offered to our soldiers along with the ammunitions and weapons and machinery is all made available from our taxes
Roads, bridges, public transportation vehicles etc all require to be made and maintained. Hence, our tax money is used for this purpose as well.
4) Social welfare
Social welfare is another term used to describe the welfare of the society. Our country is still facing many social challenges like education, sanitation, drinking water shortage, etc. Our tax money can be very helpful in helping to fund various social welfare projects.
Countries avail loans from IMF or other countries for various purposes like social welfare, etc and sometimes government don’t have enough money to pay back these loans and the amount along with the interest goes on increasing. And at such times it is our tax money that comes to the rescue.
Income Tax Returns
A tax return is the tax form or forms used to report income and file income taxes with tax authorities. When you file your tax return, it is proof that you have an income for which you have paid tax. Filing IT returns is not just a responsibility towards our nation, but it is also helpful to us in our financial life because when we apply for a loan or have some international business, we have to show our income tax return filing.
July 31 is round the corner and the deadline to file income tax returns is here. With technology everything is simplified. You can file your tax returns in quick and simple way with just one click. There are many e-filing platforms on the internet and they are all very helpful. E-filing of taxes comes with many benefits like it helps in saving time, energy and also helps to save paper. Everything can be done from one place with simple clicks. E-filing is simple, easy and beneficial to all.
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