Theme: Money & Property

Where can I go in person to file income tax returns?

For filing returns manually, you need to go to the Income Tax Department’s office to physically file returns. You can locate your nearest tax office here.

The government has set up Aaykar Sampark Kendras in some income tax offices. These are centers where taxpayers can file income tax returns and address tax related grievances. You can locate your nearest ASK center here.

What are the different kinds of taxes in India?

Tax refers to any  amount charged by the government on income, any activity, or any goods or services. Taxes in India are levied or charged by the Central Government as well as the State Governments. Some minor taxes are also levied by the authorities such as the Municipality and the Local Governments. 

Major Central Taxes

  • Income Tax: Income tax is levied by the Government of India on the income of every person.(( The Income Tax Act, 1961.)) 
  • Central Goods & Services Tax (CGST): CGST or Central Goods and Service Tax(( The Central Goods and Services Tax Act, 2017.)) is levied and collected by the central government on every supply of goods and services within the state.
  • Customs Duty: Customs duty(( Ice Gate, e-commerce portal, Customs National Trade Portal, available at https://www.icegate.gov.in/; The Customs Tariff Act, 1975)) is applicable on all goods imported and a few goods exported out of the country. Duties levied on import of goods are termed as import duty while duties levied on exported goods are termed as export duty.
  • Integrated Goods & Services Tax (IGST): IGST(( The Integrated Goods and Services Tax Act, 2017)) is tax levied on inter-state supply of goods. IGST will be applicable on any supply of goods and services in both cases of import into India and export from India.

Major State Taxes

State Goods & Services Tax (SGST): SGST(( State Goods and Services Tax Act, GST Council, available at http://www.gstcouncil.gov.in/sgst-actGST)) is a tax levied on intra-state (within a state) supplies of both goods and services by the State Government. You can find more details on the tax levied by each state here. States also levy other taxes such as taxes on petroleum and alcohol. Some other examples of state taxes are entertainment tax, excise duty, etc.

Direct and Indirect Tax

Taxes are classified on the basis of who has to pay – direct or indirect tax. If tax is levied directly on personal or corporate income, then it is known as direct tax. Some examples are personal income tax, corporate tax, etc. If tax is levied on the  good or service, then it is called an indirect tax. Some examples are goods and services tax(GST), excise duty, etc.

What is the Finance Act? Why is it important in relation to tax?

The Finance Act is enacted to give effect to the financial proposals of the Central Government for a given financial year.(( Rule 219, Rules of Procedure of the Lok Sabha, 2014.)) During the Budget presentation each year, the Government puts before the Parliament its proposed plans for the country and the expenditure to be accrued for achieving them. After they are debated and passed by the Parliament, the Finance Act is enacted by assent of the President. It gives legal sanction to the expenditure that the government may make. This process begins in February, during the Budget Session of the Parliament. 

The First Schedule of a Finance Act has four parts and contains the following information for that financial year:

  • Part I: Income tax rates and surcharges on income tax
  • Part II: Rates of TDS
  • Part III: TDS on income from ‘salaries’ 
  • Part IV: rules for calculating net agricultural income

What can be considered as charitable purposes while filing tax returns?

Trusts formed for charitable or religious purposes which are intended to provide relief to the poor, education, yoga or for advancement of any object of general public utility are allowed various benefits under the Income Tax Act, like tax exemption under section 11.

The term religious purpose is not defined under the Act. However, “charitable purpose”(( Section 2(15), Income Tax Act, 1961.)) includes relief of the poor, education, medical relief, preservation of the environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest, and supporting any other object of general public utility.

What happens if I die without a will?

Depending on your religion, there are different rules with respect to how your assets and property will be distributed after your death. However, if you make a will, your assets and property will be distributed among the people of your choosing and the specific religious rules do not generally apply.

As a Hindu person, the rules of inheritance under a law known as the Hindu Succession Act, 1956, are applicable.

Similarly as a Muslim, the rules applicable to inheritance will be according to Muslim personal law (unless you are married under the law on civil marriages). If Muslim personal law becomes applicable, you cannot distribute your entire property to people who are not your legal heirs. You can only will away one-third of your property to someone else and the remaining two-third has to be distributed among your legal heirs.

What does Account Payee on the side corner of the cheque mean?

If “Account Payee” is written between the crossed lines on the corner of the cheque, it means that when the cheque is presented to the bank by you, the cheque amount will be transferred to your bank account only. You cannot get the cheque amount in cash over the counter.

What does “or bearer” on a cheque mean?

When a cheque has no name written in the payee section and the “or bearer” has not been crossed out, it is called a bearer cheque. To know more about bearer cheques, please refer to this.