Getting the first salary in hand is always exciting. Isn’t it? However, we often tend to overlook the nominal amount that remains subtracted from our salary. This deducted amount from our salary, or our earnings is the income tax.
What is Income Tax and Why to Pay It?
In general terminology, an income tax is an amount that every citizen of a country needs to pay to the government based on their income. The tax incurred on the citizens’ income is according to the set of regulations imposed by the Income Tax Department in 1961. This rule obliges all eligible citizens to pay the specific taxable amount to the government by the end of the defined financial year.
Every citizen must pay the income tax to the government for the development of the country. The country’s growth and prosperity depend on the revenue and, the sole source of this enormous revenue is the income tax. The development of our defence and drainage system depends on the revenue from the income tax. The roads and other public facilities like healthcare and education also depend on the revenue from income taxes.
Facts about Income Tax Audit
There is also a phenomenon of an income tax audit. The income tax audit is the procedure of revenue review. It is the process that evaluates the accounts related to any business or other professions. The professionals carry out the evaluation procedure to check the revenue of the business. The experts are also responsible for observing whether the taxpayers pay the taxes on the specific financial year. Nowadays, the facility of e-filing techniques makes paying taxes a hassle-free method for the citizens. Moreover, the computational filling of income tax helps to make the return easier.
Effectiveness of the Income Tax Audit in an Organization
Efficient Records- An Income tax audit maintains the business accounts efficiently in chronological order. As a result, each detail about the total income and expenditure of the business organization remains up to date to prevent unprecedented rush in the last hour.
Revenue Accuracy- Every business is associated with the annual turnover and expenses. When there are employees involved, they are bound to get salary and, there is also a predefined salary slab. They will also fall under the category of income tax payment at the end of each financial year. The income tax audit will help show the detailed records of the income and expenditure of the company. It will also ensure that the tax deductions are accurate.
Fewer Chances of Fraud- When there is a tax audit, every expenditure and income of the business organization remains transparent. The tax audit also helps to reduce the chances of any fraudulent activities.
An income tax audit will help you to become a part of our country’s development. Our country’s defence, education, and healthcare development largely depend on the revenue from the income tax. In a country of 160 million populations, there should be a stringent tax audit system to have a detailed record of the expenses and income. It will help the government to make proper plans for the country’s overall development. It will help to highlight the weaknesses of the organization and help the authority to take necessary steps.
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