Income Tax Terms for Beginners 

This video briefly explains essential income tax terms for beginners which could facilitate a seamless tax-filing experience. Some of the terms discussed in this video are previous year, gross total income, net taxable income, income tax return, TDS and so on. An understanding of these terms could help fasten the process of tax-filing and save you a lot of time. 

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Key Takeaways

Previous year: The one that precedes the year of assessment. For example, if you file your taxes on the 15th of July 2023, then your previous year would be 2022-23. 

Assessment year: The one that succeeds the previous year during which your returns will be assessed and filed accordingly. If we were to use the example stated in the previous point, your assessment year would be 2023-24.

Gross total income: A sum of your salary, income from property, capital gains, profits from any business, as well as any income earned from other sources.

Deductions: These are provisions made by the government to help reduce your overall tax liability.

Net taxable income: Derived when you subtract deductions from your gross total income. The applicable tax slab would then be applied on the net taxable income.

TDS: When you receive your salary, a certain amount is deducted at the source by your employer as tax. This is referred to as Tax Deducted at Source. 

Income Tax Return: ITR is when you file for a return after having reported your income and having paid your tax dues. 

Frequently Asked Questions
Form 16 is mandatory only for salaried individuals and is issued by your employer. This form consists of all the information that’s required for you to file your taxes.
House rent allowance, Section 80 deductions on life insurance, health insurance, education loan, etc. are some of the deductions that you can claim while filing your taxes.
TDS is applicable on a wide array of income categories like salary, fixed deposit interest pay-outs, commissions, rent, etc.
Gross Total Income is inclusive of several elements such as your salary, capital gains, etc. Whereas Net Taxable Income is what you get when you minus deductions from your Gross Total Income.
Let’s consider that you have taken an education loan. Under Section 80E of the IT Act, you can claim a tax deduction on the interest paid on your loan. This could reduce your total taxable income, thereby reducing your tax liability.
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