FAQ | Tax Paid

When do I have to pay the taxes on my income?

Income taxes can only be finalised at the end of the previous year. However, the Income-tax Act includes provisions for paying taxes in advance throughout the year of earnings or before the end of the preceding year in order to facilitate a regular flow of cash and to make the process of collecting taxes easier. Another name for it is the "Pay as you earn" approach.

The government uses the following methods to collect taxes:

Taxes withheld at the source
Source-collected taxes
The Equalisation Levy

What is the difference between gross total income and total income?

The income used to calculate tax liability is known as total income. To determine tax liability, total income must be calculated. Certain deductions are available from Gross Total Income (GTI) under Sections 80C to 80U. Total income is the amount of money left over after deducting these GTI expenses. To put it another way, total income (TI) is equal to GTI less deductions (under sections 80C to 80U). Taxable income is another way to think at total income. The distinction between GTI and TI is better understood in the following table.

Is there any limit of income below which I need not pay tax?

Individuals, HUFs, AOPs, and BOIs with incomes under Rs. 250,000 are now exempt from paying income tax. The baseline exemption level is Rs. 3,00,000 for residents 60 years of age and older but under 80, and Rs. 5,00,000 for residents 80 years of age and more. Since there is no fundamental exemption limit for other groups of people, such as cooperative organisations, businesses, companies, and local governments, they must pay taxes on all of their income that is subject to taxation.

Furthermore, the Rs. 3,00,000 threshold restriction will apply to individuals, HUFs, AOPs, BOIs, and AJPs who chose the new tax system under section 115BAC. (relevant with effect from Assessment Year 2024–25)

What is the utility of PAN?

The department can correlate all of the assessee's transactions with the department thanks to PAN. Tax payments, TDS/TCS credits, income returns, specific transactions, correspondence, and so forth are examples of these transactions. It makes it easier to find the assessee's information and link up different loans, investments, and other business operations.

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