Learn Taxation with Practical Accounting Course

• Source Of income: A source of income is anything that provides you with a regular supply of money

• Tax slab: To ensure fairness and facilitate easy calculation, the government utilizes a system called "tax slabs," which determines income tax based on different income levels.

• Assessment Year and Previous year: The Assessment Year is the year in which the income earned in the previous year is assessed and taxes are paid. The Previous Year refers to the financial year that precedes the Assessment Year.

• Income Tax filing: The process of submitting your income tax return (ITR) to the Indian Income Tax Department is known as income tax filing.

• Advance Tax: A system known as advance tax allows people to pay their income tax year-round in installments rather than all at once at the conclusion of the tax year.

• TDS & TCS Compliance: Important components of India's structure for tax compliance are TDS (Tax Deducted at Source) and TCS (Tax Collected at Source). In order to ensure timely collection and lower tax evasion, both methods seek to collect tax revenue at the source of income.

• Accounting for taxes: The act of documenting and disclosing a company's or individual's tax obligations is known as accounting. The process entails determining the taxable revenue or loss, computing the tax liability, and documenting the tax gain or expenditure in the financial statements.

Concept of GST: A comprehensive indirect tax imposed on the delivery of goods and services in India is known as the Goods and Services Tax (GST). Value Added Tax (VAT), service tax, excise duty, and other indirect taxes imposed by the federal and state governments were replaced by it.

CGST, SGST, IGST: Central Goods and Services Tax (CGST):

•  Levied by the central government
•  Applies to intra-state supplies of goods and services (within a state)
• Has a rate that is uniform across all states
• The collected CGST goes to the central government

State Goods and Services Tax (SGST):

• Levied by the state government
• Also applies to intra-state supplies of goods and services
• Has a rate that varies from state to state
• The collected SGST goes to the respective state government

Integrated Goods and Services Tax (IGST):

• Levied by the central government
• Applies to inter-state supplies of goods and services (between states)
• Has a rate that is uniform across all states
• The collected IGST is divided between the central government and the state government of the receiving state

Tax Structure: A tax structure is the framework by which a government charges taxes on citizens and companies in order to generate income. It includes a number of components.

Exemptions: A legal provision known as an exemption permits an individual or an organization to be exempt from a law, regulation, or tax that would otherwise be applicable. There are many other reasons why exemptions could be given, including advancing religious freedom, safeguarding the public's health and safety, or fostering economic growth. 

Input Tax Credit: An Indian registered firm can claim credit for the GST it paid on purchases of goods and services that it used or planned to use for business purposes using the Input Tax Credit (ITC) mechanism under the Goods and Services Tax (GST).

More simply said, it lets companies pay less in taxes by deducting the GST they receive on their outputs from the GST they spent on their inputs. As a result, companies are protected from paying taxes on the whole value chain and just on the value they really provide.

Reverse Charge: Reverse Charge (RC) is a tax system in which the person who receives the products or services is responsible for paying the tax rather than the one who provided it. This isn't like the norm, when the provider gets the tax and sends it to the government.

Filing Returns: The act of sending a document to the tax authorities that includes your income, spending, and other pertinent financial data is known as filing a return. We refer to this document as a tax return. Calculating your tax burden, planning your tax payments, or requesting a refund for overpaid taxes are the goals of submitting a tax return.