11 May 2010
will you pleas explain these terms of incom tax, Act 1.advance tax 2.TDS 3.marginal relief 4.educational cess please explain that terms in simple language
11 May 2010
1. ADVANCE TAX > is the amount of tax which a taxpayer has to deposit in advance on the estimated income for the Financial year. It is deposit during the Financial year to which the income belongs. For ex. Advance Tax for FY 2010-2011 (AY 2011-2012) needs to be depoisted during FY 2010-2011 only.
2. TDS means TAX DEDUCTED at SOURCE. It means the amount of tax which is deducted by the person making the payment on the income of the other person which will arise because of the payment made. It indicates the tax deducted at the source of Income itself. For ex. A makes payment of Rs.10,000 to B for services. Then A will deduct Tax amount on the income of Rs.10,000 of B. This tax on Income of B is deduct at the source of income itself.
3. MARGINAL RELIEF is the Adjustment in the amount of income tax payable by a firm whose taxable income is just over the upper limit of a tax bracket (or band). Marginal relief is deducted from the total tax amount and is available usually only to small firms. In other words, It is given to the persons whose taxable income exceeds certain limit marginally but tax on the income brings his after tax balance below the lower level slab. In that case he his given relief so that his after tax balance does not go below the lower tax slab .
4. EDUCATIONAL CESS > Cess is used to describe a tax on a tax, so in eductaion cess is the tax levied on Income tax in order to provide funds for the education purpose.
11 May 2010
Welcome friend.. Example of Advance Tax >
Suppose if you estimated that The Tax liability for your Income in FY 2010-2011 is going to be Rs.15000. Then as per Advance Tax rules you are required to deposit the tax in the FY 2010-11 i.e upto 31st March,2011.
11 May 2010
If you are making payment to other then it will be income for other person and he has to pay tax.
TDS rule says that the tax liability on this income of other perosn will be deducted by you and you will deposit the TDS with the government. For this Govt. has given the TDS rates at which the tax wiil be deducted by you. I hope it make syou more clear . Regards
11 May 2010
Yes. TDS is for beneficial for assesse and ther person whose TDS is deducted can claim that amount as tax paid at the time of filing its Income Tax return.
11 May 2010
Practically it mostly happens that the estimated income is different from the actual income. In such case you can submit the balance tax amount before filing the return income. However if the amount of balance tax is more than Rs.10,000 then you have to pay the interest @1% p.m starting April 1, till such time the outstanding amount is paid.
12 May 2010
Surcharge means a charge added on top of another charge.It is the amount added on to a usual charge for a specific product, purpose, or service.
In Income Tax point of view, Surcharge is levied on teh Income Tax which itself is a charge on Income.
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