Income tax: In India, input tax refers to the tax paid in advance by individuals, corporations and companies, rather than waiting to pay all at once at the end of the financial year.
For wage earners, the withholding tax is usually arranged by employers via TDS. But other forms of income such as interest on savings bank accounts, fixed deposits, rental income, bonds or capital gains increase the tax liability. One’s tax liability must be estimated in advance.
If the tax exceeds Rs 10,000 per annum, taxpayers must pay input tax in quarterly installments (June, September, December and March).
Self-assessment load means the amount a taxpayer pays on required income after deducting withholding tax and Withholding Tax (TDS).
It refers to the additional tax paid by an individual or entity to the government after calculating their total tax liability for a given fiscal year. This is usually done when the taxpayer finds that the tax already paid, either through TDS (tax withheld at source) or withholding tax, is less than the actual tax due.
Also Read: Income Tax Return: Who is Eligible to File the ITR 1 Sahaj Form?
The return tax is calculated on the basis of the income tax rates and rules that apply for that financial year. The taxpayer can pay the self-assessment tax online through the Income Tax Department website or by visiting a designated bank branch.
Any tax paid on or before March 31 is treated as input tax paid during the same fiscal year. Pre-tax deposit is made through challan ITNS 280 by ticking the relevant column i.e. Pre-tax.
Who is liable for paying input tax?
According to section 208, every person whose estimated tax liability for the year is Rs 10,000 or more must pay his tax in advance in the form of ‘Withholding tax’. In this section you can gain knowledge about various provisions relating to the payment of withholding tax by a taxpayer.
How is input tax calculated and paid?
Withholding tax is calculated as shown below:
a) In the case of all appraisers (other than the eligible appraisers referred to in sections 44AD and 44ADA of the Income Tax Act):
At least up to 15% on or before June 15
At least up to 45% on or before September 15
At least up to 75% On or before December 15
100% on or before March 15
b) In case of eligible assessee as referred to in Article 44AD and 44ADA: 100% on or before March 15.
The Article 44AD presumptive tax regime is designed to provide relief to small taxpayers who are engaged in a business (other than the boating, renting or leasing of freight as referred to in Article 44AE).
The presumptive tax regime of Section 44AD may be applied by the following persons:
1) Resident Individual
2) Resident Hindu undivided family
3) Resident partnership firm (not a limited liability company)
A person residing in India who practices the following professions can benefit from Section 44ADA:-
3) Engineering or architectural
5) Technical advice
6) Interior decoration
7) Any other profession as reported by CBDT
How is the self-assessment tax calculated and paid?
Self-assessment Tax calculation: After completing your ITR form with the TDS and withholding tax details (if paid), the system calculates your income and checks whether any taxes are still due. You have to pay it and then fill the challan details in the return before filing.
Who is not required to pay withholding tax?
A resident senior (ie an individual aged 60 or over during the relevant financial year) who has no income from a business or profession is not liable for withholding tax.
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