please explain

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kapil abhishek (Querist)
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11 May 2010 will you pleas explain these terms of incom tax, Act
1.advance tax
2.TDS
3.marginal relief
4.educational cess
please explain that terms in simple language

Rahul Gupta

Rahul Gupta (Expert)
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11 May 2010 1. ADVANCE TAX > is the amount of tax which a taxpayer has to deposit in advance on the estimated income for the Financial year. It is deposit during the Financial year to which the income belongs. For ex. Advance Tax for FY 2010-2011 (AY 2011-2012) needs to be depoisted during FY 2010-2011 only.

2. TDS means TAX DEDUCTED at SOURCE. It means the amount of tax which is deducted by the person making the payment on the income of the other person which will arise because of the payment made. It indicates the tax deducted at the source of Income itself. For ex. A makes payment of Rs.10,000 to B for services. Then A will deduct Tax amount on the income of Rs.10,000 of B. This tax on Income of B is deduct at the source of income itself.

3. MARGINAL RELIEF is the Adjustment in the amount of income tax payable by a firm whose taxable income is just over the upper limit of a tax bracket (or band). Marginal relief is deducted from the total tax amount and is available usually only to small firms.
In other words, It is given to the persons whose taxable income exceeds certain limit marginally but tax on the income brings his after tax balance below the lower level slab. In that case he his given relief so that his after tax balance does not go below the lower tax slab .

4. EDUCATIONAL CESS > Cess is used to describe a tax on a tax, so in eductaion cess is the tax levied on Income tax in order to provide funds for the education purpose.

kapil abhishek

kapil abhishek (Querist)
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11 May 2010 thanx buddy

kapil abhishek

kapil abhishek (Querist)
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11 May 2010 advance tax k exaples bhi bata do pls

kapil abhishek

kapil abhishek (Querist)
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11 May 2010 matlab agar hum kisi ko payment kar rahe hai or wo amount osk liye income hai to wo income hamare liye TDS hoga???????

Rahul Gupta

Rahul Gupta (Expert)
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11 May 2010 Welcome friend..
Example of Advance Tax >

Suppose if you estimated that The Tax liability for your Income in FY 2010-2011 is going to be Rs.15000. Then as per Advance Tax rules you are required to deposit the tax in the FY 2010-11 i.e upto 31st March,2011.

Rahul Gupta

Rahul Gupta (Expert)
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11 May 2010 If you are making payment to other then it will be income for other person and he has to pay tax.

TDS rule says that the tax liability on this income of other perosn will be deducted by you and you will deposit the TDS with the government. For this Govt. has given the TDS rates at which the tax wiil be deducted by you.
I hope it make syou more clear .
Regards

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kapil abhishek

kapil abhishek (Querist)
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11 May 2010 that means TDS is beneficialy for assesee?
and thanks friend for giving me ur time....

kapil abhishek

kapil abhishek (Querist)
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11 May 2010 and if estimated income is more or less amount as compare to actual income then wat will be its effect?

Rahul Gupta

Rahul Gupta (Expert)
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11 May 2010 Yes. TDS is for beneficial for assesse and ther person whose TDS is deducted can claim that amount as tax paid at the time of filing its Income Tax return.

Rahul Gupta

Rahul Gupta (Expert)
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11 May 2010 Practically it mostly happens that the estimated income is different from the actual income.
In such case you can submit the balance tax amount before filing the return income.
However if the amount of balance tax is more than Rs.10,000 then you have to pay the interest @1% p.m starting April 1, till such time the outstanding amount is paid.

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kapil abhishek

kapil abhishek (Querist)
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12 May 2010 thanks buddy,,,,
now concept it clear.....

Rahul Gupta

Rahul Gupta (Expert)
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12 May 2010 You are most welcome...Dost

kapil abhishek

kapil abhishek (Querist)
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12 May 2010 waise surcharge pochna bhul gaya tha mai?
can you explain surcharge also??

Rahul Gupta

Rahul Gupta (Expert)
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12 May 2010 Surcharge means a charge added on top of another charge.It is the amount added on to a usual charge for a specific product, purpose, or service.

In Income Tax point of view, Surcharge is levied on teh Income Tax which itself is a charge on Income.

I hope it clarifies your doubts.

kapil abhishek

kapil abhishek (Querist)
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12 May 2010 surcharge ka exmple bhi bata do pls......then it will be clear

Rahul Gupta

Rahul Gupta (Expert)
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12 May 2010 Tax Amount > 25000
Add Surcharge @10% > 2500
Total Tax Laibility > 27500.

kapil abhishek

kapil abhishek (Querist)
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12 May 2010 thanks friend.......for giving me ur valuable time
thanks a lot

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