What is Tax Liability?Tax liability is the amount of money in the form of tax debt you owe to tax authorities. It is the total amount of tax you are liable to pay to the government. Taxes are applicable to the income you earn in a service or business, interest income of various investment avenues, capital gains on stocks, income from other sources such as winning a lottery, horse race etc. house rent and more. The Indian Income tax act of 1961 has set laws in relation to the amount of tax to be charged, exemption limit etc.
Tax liability doesn’t just include liabilities of the current financial year. It factors all the years and all the types of taxes you are due to pay to the income tax authorities.
To ensure that you do not miss out on paying taxes. Check out the below income tax slab rates as laid down by the government. If you belong to the below income category, you are obligated to pay taxes in order to avoid liability.
|Income Tax Slab||Tax Rate for HUF & Individual Below the Age Of 60 Years|
|Up to ₹2,50,000*||Nil|
|₹2,50,001 to ₹5,00,000||5% of net total income exceeding ₹2,50,000|
|₹5,00,001 to ₹10,00,000||20% of net total income exceeding ₹5,00,000 + ₹12,500|
|Above ₹10,00,000||30% of net total income exceeding ₹10,00,000 + ₹1,12,500|
Corporate tax liabilityCompanies in India are liable to pay taxes under the corporate tax law. If a company has operations in multiple countries but is an Indian company, then it is obligated to pay tax in India. To avoid the complication of double taxation, section 90 and 91 of the Income-tax Act has laid down rules to ease the process.
Companies liable to pay corporate tax need to get their accounts audited and submit an audit report to the income tax department. It is mandatory for companies to submit the audit report.
Click here to visit our personalized online advisor that gives you the financial expertise you need.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
Disadvantages of Early Retirement - What Happens When You're Not Working?
Early retirement seems to be good, many people enjoy life without working especially with extra earnings. But they are not aware about the cons. Lets explore the disadvantages of retiring early to save your retirement life.
5 Benefits of Health Insurance that Makes it a Must Have Cover
Here are the 5 benefits of health insurance that makes it a must to cover
When Should You Withdraw Money from a Mutual Fund?
In case of a sudden change in fund strategy or an underperformance scheme for more than 3-4 years, it makes sense to withdraw money.
How To Apply For Personal Loan
Applying for a personal loan has become extremely easy these days. With the increase in applicants, banks and other financial institutions have made the process very simple.