The income tax department gives out detailed data on tax
return filers each year. It has been going on from the assessment year 2012-13,
or AY13, onwards. The data for AY1 has been recently published. AY19 dabbles in
income earned during the fiscal year 2017-18, or FY18, (i.e. the period between
the months of April 2017 and March 2018).
The data provides a number of key insights about the
great Indian taxpayer. You can get the details of the same from the auditors in Chennai. As per the data,
only around ₹37,400 crores is generated as far as income from house
property in a year (via rents after adjusting for home loan interest and so on)
in the entire country, which shows that most of the transactions are still
cash-based and outside the paradigm of the tax net. The declared salary income,
however, is more than double the size of the declared individual business
income, which puts a wrench in the theory about the purview of the salaried middle
class.
When it comes to individual income tax, there are different
types of income that are taxed. This includes salaried income, the income
coming from the house property, business income, and interest income. The
individual-declared total income during the AY19 stood at Rs.34.1
trillion. Of this RS 20 trillion, or the bulk of the income was declared
by the salaried income.
The government announced an income tax rebate for the
salaried people to be Rs 12,500 under Section 87A of the Income Tax Act. Earlier,
the rebate was Rs 2,500. This available rebate is Rs 5 lakh a year.
This spells out zero tax for annual income up to Rs 5 lakh.
There is an exemption from income tax on annual income amounting to Rs 2.50
lakh. This exemption can extend up to Rs 3 lakh in the case of senior citizens.
The standard deduction by the government was up to Rs 40,000
to Rs 50,000 and it increased the income tax rebate under Section 87A income-tax
Act.
Besides, there is another deduction up to Rs 1.5 lakh under
section 80C for investments made in instruments such as Public Provident Fund
and the expenses incurred on children's education fees and stamp duty paid for the
house registration.
Investment up to Rs 50,000 in the national pension scheme
makes for additional tax deduction Section 80CCD(1B) of the Income Tax Act.
However, the income tax slabs were not changed until
February's interim budget. There is zero tax on income amounting to Rs 2.5
lakh, beyond this tax rate it is 5 percent on income up to Rs 5 lakh amounting
to Rs 12,500.
But with the government providing a rebate of the exact
amount, there is no tax payable on income up to Rs 5 lakh. But such assessees
are required to file their income tax returns every year. If they don't, the
Income Tax Department may send notices for the same.
Twenty percent income tax is levied if the amount comes to
Rs 5 lakh but not exceeding Rs 10 lakh a year. Income tax liability may turn
out to be Rs 1 lakh in this slab.
An annual income of more than 30 lakhs calls for a 30 percent income tax. Plus, four percent cess on income tax is levied.
An annual income of more than 30 lakhs calls for a 30 percent income tax. Plus, four percent cess on income tax is levied.
