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Paying Taxes in India - Income that is exempt from taxes in India
Who must file a tax return in India
Every person, whose total income for the previous year is more than the tax free income allowed for their category, is required to file Income Tax Returns in India, under the provisions of the I.T. Act, 1961. Tax free income allowed for each category is called a 'slab' in India. The Income Tax Slabs show the amount of income that is exempt from taxes for an individual, in a particular financial year.
Tax Slabs for the Financial Year 2014/2015
Tax slabs are different for Individuals based on age and sex. Currently in India, there are slabs set for:1.Individuals up to age 602.Senior citizens (Those over age 60)3.Very senior Citizens! (Those over age 80 and over)
NRIs Note: The enhanced exemption limit for senior citizens and women is
applicable only to residents and not to non-residents.
Tax slabs for the financial year 2014-2015
Individuals up to Age 60
Up to Rs.2, 50,000: Tax Liability = NilBetween Rs.2,50,001 - Rs.5,00,000: Tax Liability = 10%Between Rs.5,00,001 - Rs.10,00,000: Tax Liability = 20%Above Rs.10,00,000 and above: Tax Liability = 30%
Senior Citizens - Individuals between age 60 to 80 years
Up to Rs.3,00,000: Tax Liability = Nil Between Rs.3,00,001 - Rs.5,00,000: Tax Liability = 10% Between Rs.5,00,001 - Rs.10,00,000: Tax Liability = 20% Above Rs.10,00,000: Tax Liability =30%
Very Senior Citizens - Individuals Age 80 years and over
Up to Rs.5, 00,000: Tax Liability = Nil Between Rs.5, 00,001 - Rs.10, 00,000: Tax Liability = 20% Above Rs.10, 00,000: Tax Liability = 30%
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Financial year in India
The financial year in India, is not January to December as in some western countries. In India the financial year for taxation purposes, begins on 1st of April every year and ends on 31st March of the subsequent year.The financial year in which the income is earned is known as the previous year. The financial year, following a previous year is known as the assessment year. The assessment year is the year, in which the salary earned in the previous year is taxable.