Every salaried individual must know how to pay taxes and file income tax returns on time. In addition, one must adhere to the Income Tax Department’s compliances in areas such as TDS payment, income tax slab, and return filing.
While these topics might seem boring, we can’t ignore them. It is a no-brainer that ignoring the government’s compliance on these crucial matters can land an individual in trouble. So one should be aware of the tax slab under which their income falls. Moreover, one must also know how to file their returns.
In case some guidance is needed regarding the same, this is the right place. In this piece, one can learn all about TDS payment, income tax slab, and more. Keep scrolling for more.
What is TDS?
TDS stands for Tax Deducted at Source. It is a particular amount deducted when transactions like salaries, commissions, interest, professional fees, rent, etc., are made. The party that makes the payment will deduct the tax at source. For starters, the party making the payment is the deductor, and the one receiving it is the deductee.
For instance, the company will deduct the tax from the employee’s salary at source. TDS is an excellent system introduced by the government to ensure that taxes are paid at the time of income payout. This reduces tax evasion. Also, the taxpayer is at an advantage as there is no need to pay a huge amount as tax when the books close at the end of the financial year.
Now one must be wondering, what happens to the deducted amount? Well, it goes to the central government directly. Also, the deductee can check the tax amount in the TDS certificate that the deductor will issue. Otherwise, anyone can go ahead and check Form 26AS.
Why is TDS payment important?
The Income Tax Act requires individuals who make payments to deduct the tax at the source itself to reduce tax evasion. You must know the TDS limits and deduct an amount according to the threshold of the transaction. A point to be noted is that one will be charged a penalty of Rs. 200 per day for delay in filing the TDS returns after the due date. However, this is an exception for those from undivided families (HUF) who are not required to deduct TDS.
Let’s assume a scenario to understand this better. A party paying a professional fee of INR 20,000 must deduct Rs. 2,000 after a slab of 10%. So, the receiving party will be credited Rs. 18,000. The deducted amount will be remitted to the central government at the time of payment.
Sneak peek at different income tax slabs
The Income Tax Department revises the different income tax slabs according to the existing circumstances of the economy. It is essential to be updated on the tax slab since it will determine the amount you are liable to pay as taxes each year. TDS payment, income tax slab, and return filing depend on each other for a reason. For the assessment year 2022–23, no tax will be charged on incomes less than Rs. 2,50,000.
However, if the income is anywhere between Rs. 2,50,001 and Rs. 5,00,000, the tax slab is 5 percent above Rs. 2,50,000. Now, if the income falls between Rs. 5,00,001 and Rs. 10,00,000, the tax amount is Rs. 12,500 plus 20 percent above Rs. 5,00,000. Lastly, if an individual earns more than Rs. 10,00,000, then the tax amount will be Rs. 1,12,500 plus 30 percent over Rs. 10,00,000.
What are income tax returns?
TDS payment, income tax slab and returns are important areas of compliance. ITR, or Income Tax Return, is a form that needs to be submitted to the Income Tax Department of the Government of India.
Everyone must file their income tax return at the end of every financial year, starting on 1st April and ending on 31st March. The ITR form contains the necessary details about one’s income and the taxes they are liable to pay for it during the year.
The government offers seven different types of ITR forms for taxpayers. They can be filled depending on the nature and transaction amount. The type of taxpayer one falls under also decides which form one must submit. There are various kinds of incomes, including salary, capital gain, income from house property, profit and gain from business or profession, and income from other sources.
TDS payment, income tax slab, and return: How to make your TDS payment online?
By now, one can sense the importance of TDS payment, income tax slab, and filing. There’s a handy way to pay TDS online for maximum convenience. Below are the steps to easily make a TDS payment online without any struggle. This is, by far, the most hassle-free way:
Step 1: Head on to the official website of NSDL
Step 2: Choose the ‘Click to pay tax online’ option
Step 3: Then, there will be a tab that says TDS/TCS Challan No./ITNS281. Click on the ‘Proceed’ button under it
Step 4: A page showing the Challan will appear. Fill in the details like TAN, assessment year, and payment type. Type the captcha before submitting. Then, the taxpayer’s name will show up, provided the TAN is correct
Step 5: A payment page will appear for the e-payment of taxes. Enter the required bank details and make the payment
Step 6: Download and keep the Challan of TDS payment for future reference
Awareness of return filing and following all compliances before the due date is crucial. One should be updated about any changes prescribed by the IT department for such matters. If this sounds difficult, visit Piramal Finance for guidance and further assistance. This online platform is what you need to learn everything about relevant developments in the world of finance. For more information on financial matters or about personal loans, credit cards, and financial management, check out more blogs on their website!