Income Tax Return : Due Dates, Types & Penalties (FY 2018-19 AY 2019-20)
What is Income Tax?
Tax is a pivotal arm for good governance of a state or nation.
There are different types of taxes and they can all be categorized into two main groups i.e Direct tax and Indirect Tax.
A direct tax is levied on the income or profit of an individual. Income tax is an example of direct tax. Indirect tax is levied on goods and services.
Income tax due date comes every year in March ending must be followed strictly for safeguarding financial interest.
A popular example in this regard would be the GST or the VAT.
Like all taxes, accrues from Income Tax also constitute a good portion of the country/state treasury. In addition to these Income Tax also acts as a fiscal deficit stabilizers as well as minimizing impact of Global Economic Cycles.
Types of Income Tax
Income Tax is further subdivided into three more categories based on the category of payee and time of payment.
1. Tax Deducted at Source (TDS)
TDS, as it is commonly known, is collected at the income source itself. The tax is paid by a third person/corporation who/which happens to be the source of income for the taxpayer.
The other person/corporation must, however, abide by the prevalent IT laws. TDS is an ideal mechanism for the government to ensure timely Income Tax payment as well as curb tax evasion.
2. Advance Tax
Also referred to as ‘pay as you earn tax’ in contrast to the scheduled annual tax payment tax procedures, Advance Tax is paid on a Presumptive basis.
Taxpayers, Businesses, Salaried Individuals and freelancers with tax liabilities greater than Rs 10,000 for the current Financial Year are needed to pay advance tax in four instalments throughout the financial year in which they earn income……..Read More>>