It is the total amount of tax you're responsible for paying to the taxman. Tax liabilities are incurred when income is earned, there is a gain on the sale of an asset, or another taxable event occurs. No tax liability means a taxpayer's total tax was zero in the prior year, or they did not have to file a tax return. In 2020, because of the COVID-19 outbreak, both the tax filing and tax payment deadlines for 2019 federal income tax returns that would normally be due on April 15 were extended to July 15, 2020.
Individuals earning more than the income threshold of Rs. 2.5 Lakh per annum and within 60 years of age are liable to pay income tax in India. The IT department breaks down the income into 5 different categories or heads. Any individual earning above the exempted threshold from any of the following 5 heads are liable to pay to IT on their income.
1.Income from salary - Salaried individuals and pensioners are earning from a steady source of financing.
2.Income from other sources - Interest earned from savings accounts, fixed deposits, etc.
3.Income from residential property - Primarily money earned from rent as well as money earned from the property sale.
4.Income from capital gain - Income earned from the sale of capital assets, such as Mutual Funds, shares, etc.
5.Income from business or self-employment - Income earned from freelancing, contracting, working as insurance agents, CA, doctors, lawyers, tuition, and business.
The payable tax depends on the individuals income and profession, like
Up to Rs. 2.5 lakh/annum-Nil
Rs. 2.5 Lakh to Rs. 5 lakh/annum - 5% of one’s total taxable income
Rs. 5 Lakh to Rs. 10 lakh/annum - Rs. 12,500 + 20% of the total earning above Rs. 5 Lakh
More than Rs 10 lakh/annum - Rs. 1,12,500 + 30% of the total earning above Rs. 10 Lakh
The payable tax levied by the Income Tax Department on income range of Rs. 5 lakh to Rs. 10 lakh and more than Rs. 10 lakh is calculated on a progressive basis.Residents older than 60 years of age will also be levied IT only if their annual income exceeds Rs. 3 lakh/annum.