If we talk about the backbone of any country’s economy, then it is not wrong to say that tax is the thing that plays a vital role in the development of your country’s economy. There are many things to learn about tax that most people don’t know. If you are still not a filer and want to become one but don’t know how much tax you should pay and how pay it, this article will help you a lot.
Heads of income:
Your income is divided into different heads according to the nature of your income. To learn how much to pay tax, you should first know about the heads of your income because each head has different rules for paying tax.
- Income from property
- Incomes from business
- Income from capital gain
- Income from other sources
In terms of salary, we will deal with the basic salary first. A basic salary means the amount of money you collect as a reward for your work from any institute. Any allowances are not included in this amount of money. The government has set the tax rate on basic salary according to the amount of your salary. You can easily download the slab rate from Google, or you can also check online.
Income from the property:
Income from the property means the amount of money you collect from your property. Whether you have rented out your property, mortgaged your property, or have a business selling and purchasing property, the government has set the rules that any income that comes from your property side means that is income from the property and will be treated as income from a property. The government also gives the rule of incurring tax rates on property income. You can easily check it from Google.
Income from business:
The income you earn from your business is labelled under the head of income from the property. The money you earn as a result of investing also means the same. The rate of tax on income from the property is also already decided. The income tax will be based on the number of your earnings.
Income from capital gain:
Firstly, to understand income from capital gain, you should know about capital gain. The profit you earn from selling your assets indicates capital gain. Keep in mind that here only long term assets are involved in selling and as well as in capital gain. So the amount of money you earn by selling long term assets is labelled under the head of income from capital gain. Your tax rate depends upon the amount. The higher you earn, the higher you have to pay as a tax.
Income from other sources:
This term is very simple and easy to understand. If the money you are earning is not suitable in the above four mentioned heads, then this type of money or income will be written under the head of income from other sources. The tax rate has been set already. You can check it from Google.
Also read: How long to bake PO.rk c.hops.