Understanding basic tax terms like income, deductions, and tax brackets is crucial for filing your return. Let's know what these terms mean.
1
This is the total of all your income from various sources before claiming any deductions or exemptions.
2
This is the income on which you pay tax, it is calculated by subtracting deductions allowed under the Income Tax Act from your Gross Total Income.
3
This is the form you file with the Income Tax Department to report your income earned during the previous year.
4
The Assessment Year is the year in which the income tax is assessed. It starts on April 1st and ends on March 31st of the following year.
5
The Previous Year is the financial year for which the income tax return is being filed, it is the year preceding the Assessment Year.
6
TDS is paid in advance against your income tax liability. You can claim credit for the TDS deducted while filing your income tax return.
7
The Income Tax Act prescribes different tax rates for different income brackets, these brackets are known as tax slabs.