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Income Tax FAQs

1. Who is liable to pay income tax ?

Income acquired by individuals,  companies, co-operative societies etc are subject to income tax.

2. Is revenue acquired by bank deposits subject to income tax ?

Yes. Income tax is collected from the source by banks. This is determined in branch level of a bank and tax is deducted only if your income from the deposit exceeds Rs. 10,000 in a financial year.

3. Are there any exemptions from the Income Tax ?

Yes. Income Tax need be to paid for revenue acquired above a particular limit only.  This reevaluated every year in union budget.

4. Is it possible to reduce amount of tax to be paid ?

Government allows to your to divert your revenue to certain streams like house loan payment, pension plans, insurance payment etc. Money spent in these things will be deducted from your taxable income as determined by union government.

5. What is a PAN card ?

PAN stands for Permanent Account Number. PAN is a 10 digit number issued by IT department. PAN is a permanent number and it does not change during lifetime of PAN holder.

Any person who pay income tax is liable to acquire a PAN card. You are bound to quote your PAN number in certain financial transactions as stipulated by IT department.

6. What is form 16 ?

You are getting your salary after your employer deducting tax from your salary and the process is called as Tax Deduction at Source(TDS).

Form 16 is a document issued to you by your employer at the end of a financial year which incorporating the details of TDS deducted from your salary every month.

7. What is Income Tax Return ?