{"id":32760,"date":"2024-02-20T17:04:04","date_gmt":"2024-02-20T11:34:04","guid":{"rendered":"https:\/\/blog.researchandranking.com\/?p=32760"},"modified":"2025-04-15T16:39:18","modified_gmt":"2025-04-15T11:09:18","slug":"basics-of-income-tax-for-beginners","status":"publish","type":"post","link":"https:\/\/www.equentis.com\/blog\/basics-of-income-tax-for-beginners\/","title":{"rendered":"Basics of Income Tax for Beginners\u00a0"},"content":{"rendered":"
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The Interim Union Budget<\/a> 2024-25 was announced recently. All eyes were on the income tax<\/a> slabs<\/a> and the applicable tax rates for the forthcoming year. However, being an election year and an interim budget<\/a>, the tax slabs and rates were left unchanged. Most have applauded the announcement, while some are figuring out basic income tax concepts<\/a>.<\/p>\n\n\n\n

Indeed, the Budget, finance, taxation, and their impact on individuals can be challenging to understand. This blog attempts to explain helpful income tax knowledge so one can understand how one’s income is taxed.<\/p>\n\n\n\n

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Income Tax Return<\/a><\/div>\n\n\n\n
Income tax in India<\/a><\/div>\n\n\n\n
Income Tax Refund<\/a><\/div>\n\n\n\n
Tax Calculator<\/a><\/div>\n\n\n\n
Tax free bond<\/a><\/div>\n\n\n\n
Taxpayers<\/a><\/div>\n<\/div>\n\n\n\n

Basics of Income Tax for Beginners<\/strong><\/h2>\n\n\n\n

Soon, a new fiscal year will start. It is also when we fill out Form 16<\/a> and file Income Tax Returns. It can be quite confusing for those filling out the forms for the first time, given the many aspects of filling it out. Here, we explain some basic income tax concepts<\/a> to make tax filing easier. <\/p>\n\n\n\n

1. Defining the \u2018Previous year<\/strong>‘<\/p>\n\n\n\n

After you fill in the personal details in your ITR<\/a>, there is a field \u2018Previous Year.\u2019 It is one of the most crucial income tax basic concepts. It is the year before the year the tax is filed. Individuals file their income tax returns for a fiscal year in the following year. For example, if an individual files his tax in 2023-24, 2022-23 is the Previous Year. Simply put, it is the year before the current year when one files the returns.<\/p>\n\n\n\n

Assessment Year<\/strong><\/p>\n\n\n\n

Along with the \u2018Previous Year,\u2019 there is also the \u2018Assessment Year, \u2019which is crucial from the perspective of basic income tax knowledge. The assessment year is the year right after the present financial year. The assessment year also starts from 1 April to 31 March.<\/p>\n\n\n\n

Both the Previous and the Assessment years can be explained with an example.<\/p>\n\n\n\n

Period: April 1, 2023 – March 31, 2024.<\/p>\n\n\n\n

Financial year – 2023-24<\/p>\n\n\n\n

Assessment year – 2024-25<\/p>\n\n\n\n

Understanding your Salary<\/strong><\/p>\n\n\n\n

In income tax basic concepts, the income tax rate applies to one\u2019s income depending on one\u2019s income slab or category. This information about the income is available in the individual\u2019s salary slip. <\/p>\n\n\n\n

The salary slip, also known as the pay slip, which your HR department maintains, gives the break-up of the salary structure in a given month. The salary slip contains information about the basic salary, house rent allowance (HRA), conveyance allowance, and medical allowance. <\/p>\n\n\n\n

As fundamental income tax basics, the employers also mention the applicable deductions such as professional tax<\/a>, Employee Provident Fund (EPF), and Tax Deducted at Source (TDS).\u00a0\u00a0\u00a0<\/p>\n\n\n\n

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Form 16<\/a><\/div>\n\n\n\n
Tax Collected At Source<\/a><\/div>\n\n\n\n
Tax saving investments<\/a><\/div>\n\n\n\n
Income Tax on Salary<\/a><\/div>\n\n\n\n
Tax laws<\/a><\/div>\n\n\n\n
Income Tax Slabs<\/a><\/div>\n<\/div>\n\n\n\n

Income On Which You Pay Tax<\/strong><\/h2>\n\n\n\n

There is so much to income taxation, and every aspect of it is crucial to income tax basic concepts. Generally, most individuals are either salaried, businesspersons or self-employed. While this is their core income, they could also get income from other sources. In this case, your total income is your income as a salaried individual\/self-employed or a businessman.   <\/p>\n\n\n\n

Sources of Income<\/strong> for Tax Filing<\/strong><\/h2>\n\n\n\n

To understand the basic income tax concepts, we must also know the different sources of income. The following are the income heads from which an individual can earn and are taxed.<\/p>\n\n\n\n