What is Tax

What is TaxWhat is Tax?Tax is imposition financial charge or other levy upon a taxpayer by a state or other the functional equivalent of the state.How many Types of Taxes are there and what are theyThere are two types of Taxes in India 1.Direct Taxes, 2.Indirect Taxes The Taxes whose burden falls directly on the Tax payers are the Direct Taxes like Income Tax, Wealth Tax etc., The taxes in which the burden is passed on to a third party are called Indirect Taxes like Service Tax, VAT etc.

What is Income Tax?An income tax is a tax levied on the financial income of persons, corporations, or other legal entities.

Who has to pay Income Tax?A Person, corporations or other legal entities, whose earned Income in India, exceeds a prescribed limit has to pay tax.

What is the meaning of Previous Year and AssessmentYear?

Previous Year is the Financial Year ending on 31st March every year. Assessment Year is the period of 12 Months commencing on the 1st day of April immediately after the Previous Year. For eg. For Previous Year/Financial year ending 31.03.2009, the Assessment Year is 2009-10 (01.04.2009-31.03.2010).

What happens if I dont pay the Income Tax?A Person, corporations or other legal entities, whose earned Income in India, exceeds a prescribed limit has to pay tax. Any person who willfully attempts to evade the payment of any tax, penalty or interest levied under Income Tax isliable to be prosecuted u/s 276C(2) of Income Tax Act, 1961.

Whether I can get refund in case I pay any extra tax by mistake?If a person has paid more tax than he is required to pay by the tax rules, he may seek refund of the excess amount deposited. The refund will be made after processing of the income tax return.

What are tax penalties?"If the Assessing Officer or the Commissioner (Appeals) or the Commissioner in the course of any proceedings under this Act, is satisfied that any person-

(b) has failed to comply with a notice under sub-section (1) of section 142 or sub-section (2) of section 143 or fails to comply with a direction issued under sub-section (2A) of section 142, or (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty,- (ii) in the cases referred to in clause (b), in addition to any tax payable by him, a sum of ten thousand rupees for each such failure;