Do you wish to expand your knowledge of taxes in India? You may be starting a new job or a business and want to stay on top of your financial responsibilities. Understanding tax-related terms is crucial to ensuring you stay compliant with the law and avoid legal or financial troubles.

This blog post explores five standard tax-related terms you should know as an Indian taxpayer. From deductions to assessments, we'll explain each term in simple language to help you better understand your tax obligations. So, let's get started and dive into the world of taxes in India!

1. Gross Total Income

When filing your taxes, one term you must be familiar with is Gross Total Income (GTI). Calculating your GTI is the very first step in the tax filing process. GTI encompasses income from various sources, such as salary or business, house property, capital gains, and more. It also considers the exemptions and deductions you are eligible for, including interest paid on home loans, HRA (House Rent Allowance), and other allowances. So, if you want to ensure a hassle-free tax filing experience, make sure to understand what GTI means and how it is calculated.

2. Net Taxable Income

After calculating your Gross Total Income (GTI), it is essential to determine your Net Taxable Income (NTI) to determine the income tax you are obligated to pay. NTI is your income after subtracting all the applicable exemptions and deductions from your GTI. NTI is the final amount subject to taxation, and the taxpayer must pay taxes on this amount. By computing your NTI accurately, you can ensure that you pay the correct amount of taxes and avoid underpayment penalties.

3. Surcharge

A surcharge is an additional tax levied on top of the regular tax rates for those in the higher taxable income bracket. It is a tax imposed on taxes. In the case of cryptocurrencies and NFTs, they are taxed at the highest tax rate of 30%. This surcharge can vary depending on the amount of taxable income and significantly increase the amount of tax owed. It is imperative to understand that surcharges are in addition to regular taxes and can substantially impact the final amount owed to the government.

4. Advance Tax

Advance Tax is the system of paying taxes in advance through four instalments instead of paying it in as a lump sum at the end of the assessment year. Any individual whose tax liability is Rs. 10,000 or more in a financial year is liable to pay Advance Tax. The due dates for the installments are on or before 15th June, 15th September, 15th December, and 15th March. This system also applies to businesses and taxpayers who opt for presumptive schemes for paying taxes under Sections 44ADA and 44AD. It helps taxpayers manage their cash flows and reduces the burden of paying a large sum of money at once.

5. Self-Assessment Tax

As a diligent taxpayer, it is essential to consider Tax Deduction at Source (TDS) and Advance Tax obligations in the process of calculating total taxes. This practice, known as self-assessment, entails carefully evaluating these deductions before filing for Income Tax Returns during the Assessment Year.

Prior to filing for Income Tax Returns, taxpayers must settle any outstanding self-assessment tax liabilities. This proactive approach demonstrates responsible tax management and ensures a smoother and more efficient assessment process.

Conclusion

Understanding the basic tax-related terms in India is crucial for every taxpayer. These terms can help you navigate the complex world of taxation, stay compliant with the law, and avoid legal or financial troubles. We hope this blog has helped you better understand some of India's most commonly used tax-related terms.

However, if you still need help understanding the intricacies of taxation in India, don't worry! TaxNodes is here to assist you further. Our team of tax experts provides comprehensive guidance and support to individuals and businesses looking to navigate the world of taxation in India. From tax planning to compliance, we're here to help you every step of the way.

byRhea Tripathy

Meet Rhea Tripathy, a word wizard with a pen in one hand and a paintbrush in the other. By day, she slays as a content writer and by night, she indulges in her artistic passion. With a keen eye for the markets and a knack for literature, this certified trader brings her sharp mind and creative flair to everything she does. When she's not crafting clever content, you'll find her analyzing the latest market trends or getting lost in a good book.

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