income tax

1. Income tax in India
Income tax in India is governed by Entry 82 of the Union List of the Seventh Schedule to the Constitution
of India, empowering the central government to tax non-agricultural income; agricultural income is
defined in Section 10(1) of the Income-tax Act, 1961.[2]
Income-tax law consists of the 1961 act, Income
Tax Rules 1962, Notifications and Circulars issued by the Central Board of Direct Taxes (CBDT), annual
Finance Acts, and judicial pronouncements by the Supreme and high courts.
The government taxes certain income of individuals, Hindu Undivided Families (HUF's), companies,
firms, LLPs, associations, bodies, local authorities and any other juridical person. Personal tax depends on
residential status. The CBDT administers the Income Tax Department, which is part of the Ministry of
Finance's Department of Revenue. Income tax is a key source of government funding.
The Income Tax Department is the central government's largest revenue generator; total tax revenue
increased from ₹1,392.26 billion (US$18 billion) in 1997–98 to ₹5,889.09 billion (US$78 billion) in 2007–
08.[3][4]
In 2018–19, direct tax collections reported by the CBDT were about ₹11.17 lakh crore (₹11.17
trillion).[5]
History[edit]
Ancient times[edit]
Taxation has been a function of sovereign states since ancient times. The earliest archaeological evidence
of taxation in India is found in Ashoka's pillar inscription at Lumbini. According to the inscription, tax
relief was given to the people of Lumbini (who paid one-eighth of their income, instead of one-sixth)
The Baudhayana sutras note that the king received one-sixth of the income from his subjects, in return for
protection.[7]
According to Kautilya's Arthashastra (a treatise on economics, the art of governance and
foreign policy), artha is not only wealth; a government's power depended on the strength of its treasury
Amendments due to Covid-19[edit]
There was no change in the timeline for tax payment; however, if the deposit of Advance Tax is delayed, a
reduced interest rate of 9 percent per annum, or 0.75 percent per month,[16]
will be applicable instead of the
current rate of 12 percent per annum, or 1 percent, for payment of all taxes falling between 20 March 2020
and 30 June 2020.
Tax deduction at source[edit]
Income tax is also paid by tax deduction at source (TDS):
Section Payment TDS threshold TDS
192 Salary Exemption limit
As specified in Part III
of I Schedule
193 Interest on securities Subject to provisions 10%

2. 194A Other interest
Banks – ₹10,000 (under age
60); ₹ 50,000 (over 60). All other
interest – ₹5,000
10%
194B Lottery winnings ₹10,000 30%
194BB Horse-racing winnings ₹10,000 30%
194C
Payment to resident
contractors
₹30,000 (single contract); ₹100,000
(multiple contracts)
2% (companies); 1%
otherwise
194D Insurance commission ₹15,000
5% (individual), 10%
(domestic companies)
194DA Life-insurance payment ₹100,000 1%
194E
Payment to non-resident
sportsmen or sports
association
Not applicable 20%
Etc.
Income tax reqirements.
Form 16:
Form 16 is also known as the TDS (Tax Deducted at Source) Certificate. Form 16 is
the basis for filing income tax returns. Thus, Form 16 is the first form that should be
collected. The form is provided by your employer after furnishing the information
related to the taxes paid on your behalf. This is done after taking your salary,
allowances, and deductions into consideration.
Salary slips:
For salaried taxpayers, it is important to keep the salary slip ready. The salary slip
consists of all the basic details related to the salary of an individual, including basic
salary, Dearness Allowance (DA), TDS amount, House Rent Allowances (HRA),
Travelling Allowances (TA), standard deductions, etc. These details are necessary to
file income tax returns.

3. Form 26AS:
Form 26AS is also known as the annual consolidated statement, which contains all
tax-related information of the taxpayer. It also contains details of tax which is
deducted at source and details of advance tax. Form26AS is a very important financial
document required before filing ITR. Apart from this, Form 26AS also reflects details
of the Annual Information Return (AIR), which is filed by different entities based on
what an individual has invested or spent, mostly high-value transactions.
Form 16A:
Form 16A mentions TDS on interest income on fixed deposits. For instance, you will
receive a Form 16A when your bank will deduct TDS on your interest income earned
from Fixed Deposits, TDS on rent receipts, TDS on insurance commission, or any
other income which is liable for such deduction. Form 16A provides details of the
income earned and TDS deducted and deposited on such income. It also contains the
name and address of the deductor/deductee, PAN details, TAN details of the deductor,
and challan details of the TDS deposited.
PAN card:
A PAN card is one of the most important documents that you should keep ready with
you. Your Permanent Account Number (PAN) acts as your identity proof and has to
be mentioned in your Income Tax Returns.
Aadhaar card:
Providing Aadhaar details is mandatory to successfully file your ITR. According to
section139AA of the Income-tax Act, an individual is required to provide his/her
Aadhaar details while filing the return of your income.
Income tax rules
https://www.incometaxindia.gov.in/pages/rules/income-tax-rules-
1962.aspx
Income Tax Slabs & Rates 2020-2021
The Finance Minister introduced new tax regime in Union Budget, 2020 wherein
there is an option for individuals and HUF (Hindu Undivided Family) to pay taxes

4. at lower rates without claiming deductions under various sections. The following
Income Tax slab rates are notified in new tax regime vs old tax regime:
New tax regime slab rates are not differentiated based on age group. However,
under old tax regime the basic income threshold exempt from tax for senior citizen
(aged 60 to 80 years) and super senior citizens (aged above 80 years) is ₹ 3 lakh
and ₹ 5 lakh respectively.
However, under new tax regime person cannot claim up to 70 income tax
deductions while calculating taxes. Hence, every person has to make his/her own
calculation as per old and new tax regime and calculate which one is beneficial
based on type of investments made and returns earned on those investments.
Consider an example, a person aged 35 years has the total income of ₹11, 00,000
and has made the investment under section 80C of ₹1, 50,000 and under Section
80CCD of ₹50,000. He has claimed income tax deduction with medical and Leave
travel allowance of ₹50000 and HRA of ₹1,50,000 The tax payable under new and
old tax regime is as follows:

5. Income tax Example
Gujarat High Court
Commissioner Of Income-Tax, ... vs Saurashtra Wire-Healds ... on 28 March,
1967
Equivalent citations: 1968 67 ITR 524 Guj
Author: Divan
Bench: B Banerjee, R Divan
JUDGMENT Divan, J.
country is tax free in world?
Monaco: The tiny European city-state imposes zero tax on citizens income. Qatar: Another
oil-rich Arab kingdom on the list is the tiny nation located on the Persian Gulf. Saint Kitts
and Nevis: The tropical island nation situated between the Atlantic Ocean and the Caribbean
Sea is another nation with no income tax.
Highest income tax country
Sweden
1. Sweden. Sweden takes the number one spot with the highest income tax rates on Earth – just over 57%

6. Taxationin Germany
Income tax in Germany
If you earn money in Germany, you are required to pay tax on your income. The
German tax system operates a progressive tax rate in which the tax rate increases
with taxable income. Most people will pay income tax through payroll deductions by
their employer. If you have multiple professions, run your own business or are self-
employed in Germany, you will be required to submit an annual tax return to work
out your income tax (see below).
German income tax rates 2021 (SLABS)
The income tax brackets for 2021 are as follows:
Income Tax Rate
Less than 9.744 euros 0%
9.744 - 57.918 euros 14% to 42%
57.919 - 274.612 euros 42%
More than 274.613 euros 45%
Withholding tax (Lohnsteuer)
Withholding or payroll tax is income tax and other contributions that your employer
withholds from your salary. This will apply to the vast majority of expats in Germany
and means your rate of income tax has already been worked out and paid for you. If
this is your only source of income, you are not obliged to submit a tax declaration.
The withholding tax is taken from your pay each month. When discussing salary
and employment contract terms for a new job, it is important to be aware of this
deduction. There is a large difference between your gross salary and your net salary
once taxes have been paid.
The withholding tax levy comprises a tax on your salary (Lohnsteuer), national
insurance contributions, taxes on “benefits in kind”, a solidarity surcharge, and a
church tax:
Paying Taxes in Germany
Expatriates living in Germany can be subject to German taxes, especially if they have
German source income. The German tax system is similar to the structures in other western
countries. You pay income taxes throughout the year, usually with an employer deducting
tax from each paycheck. Adjustments are then made at the end of the year for possible
under or overpayments.
individual income tax

7. The individual income tax (or personal income tax) is a tax levied on the wages, salaries,
dividends, interest, and other income a person earns throughout the year. The tax is
generally imposed by the state in which the income is earned.
For 2020 a taxable income of less than €9,169 was tax-free for a single person
(€18,388 for a married couple). Incomes up to €55,960 for a single person (€119,220
for a couple) were then taxed with a rate progressively increasing from 14% to 42%.
Incomes from €55,961 (€111,922) up to €265,326 (€530,652) were taxed at 42%.
Incomes over €265,327 for a singe person and €530,654 for a married couple were
taxed at 45%.
For 2021 the taxable income amounts have increased a bit. Taxable income of less
than €9,408 is tax-free for a single person (€18,816 for a married couple). Incomes
from €9,048 (€18,816) up to €57,051 (€114,110) are taxes at a rate of 14% to 42%;
incomes from €57,051 (€114,102) to €270,500 (€541,000) are taxed at 42%.
Incomes over €270,500 for a singe person and €541,000 for a married couple are
taxed at 45%.
Deductions
As in many other countries, Germany allows a variety of deductions that can lower
taxable income. Deductions are granted for circumstances such as children under 18
(or under 27 if still attending school and without earnings), specified insurance
premiums, charitable and political contributions to German entities up to certain limits
and unavoidable extraordinary expenses above a certain limit (such as illness).
Deductions from compensation are also made for four social programs: retirement,
unemployment, health insurance and long-term nursing care. Payments for these
programs are normally borne equally by the employer and the employee. The
employer's share of contributions is not considered as taxable income to the
employee and the employee's portion is tax deductible up to a certain limit. A tax
adviser can tell you more about other deductions and the requirements to earn them.
For more information go to our article on German Social Security and Employee
Benefits.
Tax Returns
You don't necessarily need to file a tax return if your only source of income is your
employee salary. This is because the Lohnsteuer is withheld from the salary. But, if
you may be eligible for a tax refund or have other items that you may want to itemize
(deductions or other income or benefits) or if you are self-employed you need to file
a tax return.
Every tax return is under audit, therefore if the tax assessment is issued and is not
preliminary, the assessment can only be changed in the future by the occurrence of
extraordinary circumstances (e. g. tax evasion).

8. As a rule, the income tax return (Einkommensteuererklärung) should be filed by July
31 of the year following the one in which the income was received. If you use the
assistance of a tax consultant, your tax filing date is extended to December 31. In
some circumstances that date can be extended further to February 28. There may
be penalties and interest assessed if the return is filed late.
There are a few situations where the taxpayer is required to pay taxes even though
the income is less than the personal allowance, especially when tax-exempt income
(such as foreign-sourced income) must be considered for the determination of the
applicable income tax rate (progression clause). Taxes are then assessed based on
a sliding scale.
Other Taxes
In addition to the various forms of income tax there is also a series of sales taxes
that significantly impact both individuals and businesses. The major tax is
the Mehrwertsteuer (value added tax), which accounts for a quarter of the
government's revenue and is second only to the Lohnsteuer in this regard.
The Mehrwertsteuer assesses a levy on each step in the production and delivery of
most items available for purchase. It applies to services as well as goods and the
standard current rate is 19%. A reduced rate of 7% currently applies to certain
products, including food and printed material. Medical and insurance services are
generally exempt, as are exports of goods abroad and services rendered abroad.
German Tax Classes and requirements.
Employees of German companies are normally assigned a tax class by the tax
authorities according to various categories. The "Tax Class"
(Lohnsteuerklasse or Steuerklassen in German) is important in determining the
amount of withholding (income) tax deducted from a salary as well as in determining
the value of a number of social benefits for which the taxpayer may be eligible. A tax
class may be assigned to an employee by the authorities based on marital status
and other criteria. In some cases a taxpayer can request to be placed in a certain
class.
Class I - applies to single (unmarried) people; those living in a registered civil
partnership; those who are divorced, widowed or married unless they fall under tax
class II, III or IV
Class II - applies to those who are a single parent and living alone with a child or
children and are entitled to the child allowance (Kindergeld) and/or other government
assistance
Class III - applies, upon request, to married employees if both spouses live together
in Germany and one spouse is the sole wage earner; or the other spouse earns a
salary but chooses to be categorized under Class V. Also applies to widowed
employees for the calendar year following the death of the spouse if both were
employees and living together in Germany on the day the spouse died
Class IV - applies to married workers who live together and have not selected Tax
Class III or V for one of them
Class V - applies to a taxpayer whose spouse is classified under Tax Class III

9. Class VI - an optional class available to individuals who may have more than one job
and earn money from other employment. The taxpayer may have more than
one Lohnsteuerkarte resulting from the multiple jobs.
There may be various family models and permutations of the tax classes. To be sure
to have the best classification you may want to consult the tax office or a tax advisor.
Residence rules
For the purposes of taxation, how is an individual defined as a resident of
Germany?
An individual is considered resident if they maintain a domicile or habitual place of
abode in Germany. A domicile is a home or dwelling owned by or rented to the
taxpayer who has full control over that property. Domicile is a question of fact and is
not determined by the intention of the taxpayer.
The habitual place of abode is established when an individual is physically present in
Germany on a long-term basis. Long-term is defined as more than 6 months.
Is there a de minimus number of days rule when it comes to residency start
and end date? For example, a taxpayer can’t come back to the host
country/jurisdiction for more than 10 days after their assignment is over and
they repatriate.
No. The habitual place of abode is established when the individual is physically
present in Germany for a continuous timeframe of more than 6 months. A continuous
abode is established and maintained if the interruptions are for a short period only
(such as holidays, journey home, and business travel), so that the stay is still
regarded as one continuous stay.