No matter where the person lives in the world. He has to pay tax to the local government. If we look at the history of Tax word, then the tax word has been taken from the latin word taxo which literally means, “A compulsory fee which is imposed by the government on any person or institution for raising revenue and from the collection of this tax, the government uses it for public works.”
The biggest change in tax slabs ever happened in the year 2017
There are many types of taxes i.e. Central, government tax, state tax, indirect tax, direct tax etc. India has a very good percentage of people who came in the category of Tax payers. The biggest change in tax slab came in the year 2017 in india. when the Central Government implemented the Goods and Services Tax and which has been considered as one of the biggest reforms we have seen so far. Tax evaders are facing a lot of difficulties after the implementation of GST.
Certain sections of the Income Tax Act also prohibit tax.
Talking about the budget of this financial Year of India, not much has changed. No tax is applicable on income up to 2.5 lakhs in a financial year. If it goes more then the people has to pay tax within a certain time according to the rules set by the government. But there are some sources of income on which there is no tax of any kind. The sources of such income, which are not taxable, mainly come from agriculture. This is such a way of earning that no matter how much income is earned, no tax has to be paid. On the other hand, even if a person is earning on partnership in farm work, he will not have to pay any tax on his earnings from that.Section 56(2)of the Income Tax Act, 1961 states that if a person has received such a gift of not more than 50 lakhs, then it is not necessary to pay tax on it or else section 12(a) and 12(aa) of the Income Tax Act 1961 shows that if any gift is received from any charitable or religious trust, then the government cannot levy tax on that too. Also, if some gift is received by inheritance, then that too will not be taxable. Money or jewelry can come in this gift.
Government and private employees also do not have to pay tax in the earnings of some sectors.
If we talk about a government employee, then the employee doing government job does not have to pay tax on the amount of his gratuity amouny But this amount should not exceed 20 lakhs. In case the amount exceeds 20 lakh, tax has to be paid. On the other hand, even if a private employee receives gratuity amount of 10 lakh after retirement, he does not have to pay tax on it. On the other hand, when an employee has worked for more than 5 years anywhere then there is no tax to be paid on PPF i.e. Public Private Fund received from there. Also, the amount received from the insurance policy does not come under the tax payable category.
so these are the some earning areas where tax is not needed to pay. and it is also essential to know by everyone for their personal knowledge.