Did you just swipe off all your money? Did your credit card debt overflow? did the taxes eat up all of your salary?If you’re struggling with taxes keep reading. The Indian Tax System is insanely complex and convoluted.Add to that the salary structure of these private firms. I highly recommend you to spare some cash for a personal Charted Accountant to handle your finances.If you have multiple sources of income or assets the tax calculation can get quite crazy.As when it comes to spending that answers your question, where did my money go? The first thing you should do is compute your percentage each month for savings, expenditure and inflow of income. Set a fixed percentage aside as savings if you want some form of financial independence at some stage in your life.
Taxes are levied by governments on their citizens to generate income for undertaking projects. It helps to boost the economy of the country and to raise the standard of living of its citizens. The authority of the government to levy tax in India is derived from the Constitution of India, which allocates the power to levy taxes to the Central and State governments. All taxes levied within India need to be backed by an accompanying law passed by the Parliament or the State Legislature.For individual tax payers , her is a list of the tax brackets and corresponding taxes.The tax percentage of 5% for <2.5 lac is eliminated past the 2017 budget.Exemptions can be claimed under section 80C, 80G in form of LIC, PPF, NSC ,payment towards loans, house rent.
Budget 2017 Highlights
Payslip,common terms seen in most slips include YTD(Year-to-Date) , gross and total taxable salary.For those who work for a company , most payslips are monthly and bonuses are quarterly. A quarter is a consecutive three-month period that a company used to report its earnings and dividends; its universal and DOES NOT change from company to company Q1: January, February and March Q2: April, May and JuneQ3: July, August and September Q4: October, November and December.Here is a sample excel sheet for you to understand the calculation.For someone earning 25L , the yearly tax is about 5.625L as can be seen below.
In India, you are required by law to file income tax returns, if your total income during the financial year exceeds the basic exception limit (Rs 2 lakhs for general category of individuals). You must include your AdSense income and other online income in your tax returns.If you make good online income, then you must open a “current account” in your bank, preferably in the name of your business. By using a current account, you are making it clear to the bank and other regulatory bodies that the income is from a business and thus you can avoid a lot of unwanted enquiries and questions from bank, income tax and enforcement departments.
Bloggers can earn good money through advertising and by partnering with brands and are liable to pay a 15% service tax on income earned from blogging in addition to tax on income.Bloggers earning revenue below Rs 20 lakh a year don’t have to pay GST. Above that, they have to pay 18% GST. Read more at: link
Bloggers usually earn through one or more of the following :
Affiliate Sales & Marketing
Services like Blog Consultancy, Blog Designing, SEO Services et.al
Blog /Self employed taxes.Service Tax is levied on blogging income at the rate of 14.5 %.Service means any activity carried out by a person for another, for consideration and includes a declared service.Service tax is levied on all services except the services mentioned in the negative list as per section 66D.An Indian blogger & freelancer is required to submit his/her income tax return in the ITR-4 form at the end of a financial year. The income tax return should indicate the following things:-1) Revenues earned and their sources.2) Expenditures incurred.3) Depreciation claimed on assets.4) Investments made for which Deduction have been claimed.5) Total taxes paid including the advance tax paid or TDS deducted (if any).
Exceptions: A blogger may have various types of income; service tax is levied on only that income which is in the nature of service.The blogger can claim small service provider exemption of Rs. 10 Lac (if the service receipt in the previous year does not exceeds Rs. 10 lac), export service exemption of Rs. 25 Lac (for AdSense income) and for rest Rs. 5 Lac he will have to pay service tax.Rs. (5 Lac/ 114.5 )*14.5 = Rs. 63,319/-In the next year he cannot claim small service provider exemption of Rs. 10 lac (since service receipt in the previous exceeds Rs. 10 lac).So if a blogger is importing or exporting goods through his blog then he will have to comply with the provisions of Customs Act 1962.
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