Important terms and their meanings you must know ahead of Budget 2024
Important terms and their meanings you must know ahead of Budget 2024
Tax deduction: As the name suggests, it refers to the amount to be deducted from taxable income to lower the amount of tax that you owe.
Rebate: Rebate is a reduction in the total income tax. Just as deduction allows reduction in the taxable income, rebate enables tax payers to reduce their tax component by the amount of rebate.
Surcharge on tax: Surcharge is applicable on those persons whose income is more than ₹50 lakh. It applies to the tax payable and not the total income. A surcharge of 10 percent is levied on tax rate of 30 percent, thus raising the total tax liability to 33 percent.
TDS (Tax deducted at source): This is the way of collecting tax at the origin of income; for example, banks at the time of transferring interest income, and companies while transferring dividend income.
Old tax regime: This is the previous tax regime with four tax slabs and the highest tax rate of 30 percent is applicable on incomes above ₹10 lakh. This regime continues to offer all tax deductions which have been phased out in the new tax regime.
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