kapil abhishek (student) (293 Points)
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 
Rahul Gupta
(Project Controller ACA MBA(Fin.))
(8019 Points)
Replied 12 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.
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