Monday, 10 November 2014

Income Tax in India payable by resident and non resident Indians

The government of India imposes an income tax on taxable income of individuals, Hindu Undivided Families (HUFs), companies, firms, co-operative societies and trusts (identified as body of individuals and association of persons) and any other artificial person. Levy of tax is separate on each of the persons. The levy is governed by the Indian Income Tax Act, 1961. The Indian Income Tax Department is governed by the Central Board for Direct Taxes (CBDT) and is part of the Department of Revenue under the Ministry of Finance, Govt. of India. There are close to 35 million income tax payers in India. Income Tax is payable by both resients and non residents .The three residential status, viz.,
  • Resident Ordinarily Residents
  • Under this category, person must be living in India at least 182 days during previous year Or must have been in India 365 days during 4 years preceding previous year and 60 days in previous year. Ordinary residents are always taxable on their income earned both in India and Abroad.
  • Resident but not Ordinarily Residents
  • Must have been a non-resident in India 9 out of 10 years preceding previous year or have been in India in total 729 or less days out of last 7 years preceding the previous year. Not residents are taxable in relation to income received in India or income accrued or deemed to be accrue or arise in India and income from business or profession controlled from India.
  • Non Residents
  • Non Residents are exempt from tax if accrue or arise or deemed to be accrue or arise outside India. Taxable if income is earned from business or profession setting in India or having their head office in India.

    Heads of Income

    The total income of a person is divided into five heads:
  • 1.Salary income,
  • 2. Income from house property
  • ,3.Income from business or profession
  • ,4.Income from Capital Gain .
  •  5.Income from other sources
 
We have covered income at Sr.No. 2, 3, and 4 and Salary Income along with other incomes will be discussed in detail. A must read for every individual. It will be in detail and discussed at length so that no question remains unanswered. So far the write ups were brief synopsis.  You may also be interested in Money Multiplier India - Banking Financial Investment and Taxation Guide  and  Employment News India.

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