Taxation System in India

Nope, money doesn’t grow on trees.

Neither does it come out of a magic hat.

So what are the sources of income?

Your salary. Okay, your hard earned salary.

Plus any income from renting out property.

Plus capital gains from buying or selling of shares and other capital assets.

Plus income from any business that you operate.

And other sources, like interest and dividends.

Put them all together and what you have is your gross total income.

Now, how do you reduce your tax liability?

You can either invest in a PPF account. or invest in a fixed deposit for 5 years.

Or Pay the premium on a life insurance policy.

Or repay the principal component of your home loan.

And certain other permissible deductions.

This way, you can reduce your taxable income by up to one lakh rupees.

Now that we have your total income, let’s figure out your tax liability.

The current tax structure is as follows:

Basic exemption limits are set for men, women and for senior citizens.

All income over this limit attracts a tax based on the slab the amount falls in. Currently, the slabs are as given.

Taxes don’t have to be taxing.