Indian Income Tax Law

 Income tax is the tax to be paid to the Government of India on the personal income of an individual or business entity. All Indian citizens are required to file income tax returns, if their income is above a certain amount. However, the amount of tax to be paid depends on the amount and type of income, status and age of an individual.  

It may come as a surprise to you, but it is true that there are a number of tax deduction benefits that we as taxpayers forget to claim. Here are some valuable tax deductions that you shouldn’t overlook.

Not all of us are familiar with various tax deduction concepts and the benefits we can avail from those. We tend to follow certain myths regarding tax deduction and we end up making the whole process of taxation too complex. Let’s understand some common tax myths.

Tax Deduction and its Myths

Here are some of the popular tax deduction myths:

Indian legal news brings you the latest updates about the new rule proposed by the Reserve Bank of India. The apex bank has said that banks shall fix their individual rates of interests for savings deposits. The RBI has also favored the deregulation of interest rates for agriculture sector, EXIM and savings account. Such deregulation is intended to encourage more financial inclusion.

On June 14, 2010, the Bombay High Court ruled that fashion designers are artists and hence eligible for income tax exemption, which came as a relief for many struggling designers in the Indian fashion industry. Indian law pertaining to tax exemption was not so liberal earlier. Ten years ago, when the ace Indian designer Tarun Tahiliani petitioned for I-T exemption under the category of artists, the income tax department rejected his claim as it did not recognize a fashion designer as an artist. A division bench headed by Justice J P Devadhar and Justice Dhananjay Chandrachud proclaimed that fashion designers should get tax privileges available the category of artists.

A Hindu Undivided Family (HUF) or a Joint Hindu Family is treated as a separate taxable entity under the provisions of sec. 2(31) of the Income Tax Act, 1961. This is in addition to an individual as a separate taxable entity. As per Indian laws, the same person can be assessed in two different capacities: as an individual and as a Karta or the leader of his HUF. The rates of income taxes for HUFs are the same as the ones applicable for individuals.

Are you aware of your legal rights in the event of an income tax raid? Well, this article will acquaint you with those rights.

Under Indian Laws, gift tax was payable by the donor up to 30^th September 1998, The Gift Tax Act, 1958 was repealed with effect from 1^st October 1998 and therefore, there is no gift tax on gifts made on or after that date. Indian law allows NRIs to gift anything to one's relatives as long as they have the capacity to buy those gifts and the gifts are genuine.

Online trading can be defined as the performance of trading activities, such as buying or selling financial securities, currencies and commodities, on the Internet. The foremost requirement for successful online trading is to be patient and use the apt software.

Brokers are not directly involved in the Internet-based investment practice, with most online trading portals providing opportunities for trade with the biggest stock houses, such as NSE and BSE. The total turnover of the online trading industry has shown remarkable growth from a mere 3 percent in 2003-04 to 16 percent in 2006-07.

Wealth tax is an annual tax that is quite similar to the concept of income tax. It is charged on an annual basis at the rate of one percent of the total amount by which net assets exceed Rs.15 lakhs. This tax is charged by taking into account the market value of the property, even if it does not generate any revenue.