Chief Differences between Professional Tax and Income Tax

We often confuse with the terms Income Tax and Tax Deducted at Source (TDS) while filing our tax returns. So, before you file your returns keep a tab on certain terms to avoid any sort of confusion.

The Simple Differences between Income Tax and TDS:

1) Income tax is administered on all individuals or corporates for whatever may be the income limit above the tax limit for a particular time frame.TDS, or rather tax deducted at source, here the tax is deducted at the source of income, just assuming that you have a taxable income.

2) You pay income tax based on your annual income, whereas TDS is deducted at source on a regular basis in the particular year.

3) A taxpayer is required to pay income tax on his total annual income, whereas TDS is can only be regarded as the partial contribution to his total annual income.

4) When it comes to the TDS, the payer deducts the tax and is paid to the Government by the payer on the payee’s behalf It is expected of the taxpayer to pay the income tax. 

5) Suppose the taxpayer's income is much below the taxable limit and the TDS is still deducted then he can claim the TDS when he files his returns. TDS is particularly deducted from salary income, fixed deposits and so on. 

Conclusion

When the financial year draws to an end your total tax liability is calculated and the number of TDS deducted is subtracted from the total tax liability.

In some cases, the TDS is not applicable especially when the net taxable income is much lower than the taxable limit of Rs 2,50,000 for a person and Rs 3,00,000 for Senior Citizen.

When you file your returns you must ensure that you have taken into account all the TDS deducted and you can claim for the same mentioning the amount.

Suppose you have not received your tax credit statement from your employer or bank then you can file your returns by checking the form 26AS which provides you the required credit information.

You can seek the help of a Tax consultant in Hyderabad, or wherever you are based for professional tax registration so that you can file your returns without any problems. Ensure you file your returns in proper time to avoid fines, same goes for professional tax too, that is why you should seek professional help if you are clueless about the proceedings.