Paying Taxes for the first time: New and Old Income Tax Slabs and Rates in India for 2022-23

If you are a salaried individual, you need to pay taxes. However, there are a few details you need to consider.

Tax made simple Here's what you should know

Is this your first time paying taxes? Adulthood can seem daunting, especially when it comes to anything involving money. With this article, we simplify the concept of taxes for you with answers to all your questions and other important details you must know.

Is it necessary for you to pay taxes?

That depends on how much money you make and what you do. The base pay, dearness allowance, special allowance, and bonuses are all taxable salary components. Other expenses, such as dwelling rent allowance, conveyance, and other reimbursements, are free from taxation if certain conditions are met. However, besides your employer's salary, you may be able to receive interest on fixed deposits, bonds, and the sum in your savings account. If you invest in equities or mutual funds, there may be dividend income and capital gains. If you own real estate, you may earn money from renting it out.

Also read: Best tax-free bonds

Tax Deducted at Source (TDS)

Your company determines how much tax you owe and deducts it from your pay, which is known as TDS. However, because tax is due on your entire income, your employer's TDS may not be enough unless you include it in other sources of income (interest, rent, capital gains, etc.). You must also record the income from your prior employer if you changed employment during the year. If you don't do so, you'll wind up using the basic exemption twice a year, resulting in a large tax bill at the end of the year.

You are asked whether you have made any tax-saving investments or qualified for any other deductions or exemptions before your employer deducts tax. Under Section 80C, you can invest up to Rs 1 lakh in any option. Some of these are automatic, such as your payment to the PF. PPF, NSCs, tax-saving FDs, ELSS mutual funds, life insurance policies, and pension plans are other possibilities. Your decision should be based on your requirements, abilities, and willingness to take risks. If you don't have any dependents, don't acquire an insurance policy. If you can't bear the risk of stock investments, don't invest in equity-based ELSS funds. There are a few more deductions to be made.

Tax Slabs

How to submit your tax return?

You may file your tax return either online or offline, with or without the assistance of a tax expert. At the very least, seek the advice of a tax professional for the first time. A certified accountant can assist you in filling out the form and selecting the appropriate ITR form for your situation. You may begin submitting your return on your own after you've gotten the hang of it. Online filing is relatively straightforward and does not take a lot of time. Some websites will walk you through each stage of the procedure.

Conclusion

Payment of taxes benefits the nation on various levels, including national development, infrastructure improvement, societal uplift, and even national welfare programmes.

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