Budget 2019: The income tax payers will not pay income tax of Rs 5 lakh to the people of the finance ministry.

Direct tax is paid on income based on the income of a person or company to the federal government as income tax i.e. income tax.

While presenting the budget 2019, Finance Minister Piyush Goyal has announced a major relief for the job seekers. Now those who have come to Rs 5 lakh will not have to pay any kind of income tax. In the last financial year, the figure of this tax slab was 2.5 lakh rupees.

What is the income tax calculation?

Two types of taxes are collected from the Government of India. A Direct Tax and Second Indirect Tax. Indirect is levied on tax goods and services, in which GST is the largest share. Whereas direct tax is imposed on the income of the common man and organizations and their profits. Direct tax payment goes directly to the government treasury.

Talk about direct tax, on the basis of income of a person or company, the federal government is paid as income tax.

Who are the tax payers in India?

Inside India, every person, company or business is responsible for paying income tax. Income Tax Scale i.e. tax slab is determined annually by central budget. Those earning above Rs 2.5 lakh for the financial year 2018-19 have to make income tax.

According to the Income Tax Act of 1961, there are seven categories of persons responsible for paying income tax:

1. A person;
2. A Hindu undivided family (HUF);
3. A company;
4. A firm;
5. A association of individuals (AOP) or the body of individuals (BOI);
6. A local authority, and;
7. Every artificial judicial person who does not belong to any of the preceding categories.

Broadly, the tax payers paying income tax to the government are mostly in the middle class. But the surprising facts are that in this country about 20 million people fill income tax. So far, 93.3% of the people used to show their earnings less than 2.5 lakhs. There are only 6.6 lakh people who pay income tax by showing their earnings more than 2.5 lakh. That is, in total, 13 lakh 86 thousand people pay income tax only.

That is what 14 lakh people pay a tax on the income of the government. On whose strength the government runs its schemes. But these middle class people have hopes for their betterment every year from the government. The middle class always hopes with the government during every budget to increase the tax slab, so that the weight of their pockets is slightly reduced. This announcement of the finance minister in this budget is going to get great relief.

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