Tax Hacks - Jargon Busters

Making India Tax Wise

Jargon Busters

  • 1

    Section 80C

    Section 80C can help you reduce up to ₹1,50,000 from your gross taxable income. You can invest in mutual fund/equity linked saving scheme, life insurance plans or Public Provident Fund, to avail this tax benefit.

  • 2

    Section 80D

    This section allows you to claim tax deductions on health insurance premiums paid or expenses incurred for self/family and parents. ₹25,000 is the deduction limit if age of the premium payer is below 60. Additional deductions for parents upto 60 years is ₹25,000 and above 60 is ₹30,000.

  • 3

    Income Tax

    An annual tax on income, which is given to a country’s government, is called Income Tax.

  • 4

    Income Tax Slabs

    Our incomes are grouped into blocks called tax brackets or tax slabs. And each tax slab has a different tax rate. In India, we have 4 tax brackets each with an increasing tax rate:

    • Income earners up to ₹2.5 lakhs per year
    • Income earners between ₹2.5 lakhs to ₹5 lakhs per year
    • Income earners between ₹5 lakhs and ₹10 lakhs per year
    • And those who make more than ₹10 lakhs per year
  • 5

    Assessee

    An assessee is a person who is responsible to pay taxes.

  • 6

    Income Tax Exemption

    Any income, which is not taxable by the government, is called income tax exemption. These include income from a will, wedding gifts, amongst others.

  • 7

    TDS

    It stands for tax deducted at source. As per the Income Tax Act, any company or person making a specified payment is required to deduct tax at source if the payment exceeds certain threshold limits. TDS has to be deducted at the rates prescribed by the tax department.

  • 8

    Tax Return

    An income tax (IT) return is the tax form or forms prescribed by Government to file the income and tax details of a year with the Income Tax department.
  • 9

    Tax Audit

    Tax audit is a mandatory audit prescribed by the Income Tax Act for certain class of assessees in order to ensure that the books of accounts of the company have been maintained in accordance with the provisions of the Income Tax Act. This audit effectively curbs tax evasion and ensures tax compliance.

  • 10

    E-filing of Income Tax Return

    E-filing or electronic filing is submitting your income tax returns online. There are 2 ways to file your income tax returns. The traditional way is the offline way, where you go to the Income Tax department’s office to physically file your returns. The other way is when you e-file through the internet.

  • 11

    Income Tax Refund

    Taxpayers generally pay tax at regular intervals on the income during the year. In case the final tax liability is lower than the actual payment made, they are eligible for refund of the excess payments.

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