Page 22 - Mousumi: Unbelievable Transformation

The poorer are taxed at lesser rates, whereas the richer at a high rates depending
on their income. The government also gives subsidy on the essential items to the
poor. A good taxation and compliance system is required for the smooth
running of state.

The following points are very useful for filing of Income-tax Return and
payment of tax:
1. Every individual can apply for PAN by filing form 49A. It is available on the
website of NSDL (National securities and Depository Limited). In case of
payment/interest/salary is received from any organization and tax is deducted at
source by the payment making agency, one needs to give full details of TAN (i.e
Tax Deduction Account Number) of the agency deducting tax as TDS in his
ITR. It is worth mentioning that the GST number of any business contains PAN
number as PAN is used in making and allotting the GST number. The PAN is
now linked with the AADHAR number, for greater transparency and record-
keeping purposes.

PAN refers to Permanent Account Number, and it has 10 alphanumeric digits.

The fourth digit of the PAN shows the status of the taxpayer and which is P

for individual, T for Trust, F for Firm, C for companies, A for Association of

persons, B for Body of Individuals, H for Hindu Undivided Family, L for local

Authority, G for government and J for Juridical Person. The status of taxpayer

matters a lot as the tax rates and applicable tax rules/ laws/sections are

2. For payment of income tax, the income has been classified in five types as
mentioned in the Income-tax Act 1961, as under
(i) Income from Salary and pension
(ii) Income from House Property
(iii) Capital gain tax (i.e. tax on sale and purchase of property/shares or in
case asset transfer. It is further called short term capital gain or long term
capital gain based on the period of possession of asset). If the capital gain is
negative, it is called capital loss.
(iv) Income from profit and gains from business or profession.
(v) Income from other sources
3. For filing of Income tax Return, it is necessary to know the status of taxpayer
and his all sources of income, which is summarized as under:
Status Of Taxpayer Five Types Of Income
Individual Salary And Pension
Company House Property Income
Firm Captal Gain
Huf Business Or Profession
Aop/Boi Income From Other Sources

♦♦Career Mantra♦♦ Page 21