What is tax credit?

What is tax credit?


For those of you who have income, you actually have to pay income tax. There are many articles of income tax, for example income tax article 21 to article 26. In addition to articles of income tax, additionally there is other related term what is intended by a tax credit.

 What is a tax credit?

What is tax credit? Tax credit is a computation of income tax that will be taken at the start of the period or already paid by the taxpayer. Taxpayers have a responsibility to pay tax owed for the current year. This payment can be achieved by yourself as a taxpayer or deducted by the person who gives wage. In one tax year, you are able to pay it in monthly installments.

Who can do tax credits? According to article of the Income Tax Law, taxpayers in the country and enterprise forms can reduce the amounts of taxes owed. There are many tax credits that can be paid in installments, such as:

Withholding tax is carried out from wages or the inclusion of service work and other actions as stipulated in article of the Income Tax Law.

Tax collection is based on the business of the taxpayer as stipulated as per the article of the Income Tax Law. Withholding tax is dependent on income from one’s own property in the form of rent, interest, dividends and others as stipulated in article 23 of the Income Tax Law.

Payment is made gradually by the Taxpayer himself/herself as regulated in article 25 of the Income Tax Law.

Before that, you must understand the meaning of income tax articles 21 to 25. Income tax article 21 is a tax that is billed on the basis of work, services or other activities received by the Taxpayer in the country. Article 22 Income Tax is a tax that is charged to taxpayers on the basis of profits derived from the results of his own business or entrepreneur.

Article 23 income tax is a tax that is charged on the basis of a business operating in the country, while income tax article 24 is a company working overseas. Ultimately, income tax article 25 is a tax that can be paid in installments either by an agency or an individual as a form of government relief.

Conditions Not Creditable

There is a condition where a taxpayer cannot make a tax credit for the payments he is supposed to make

The Meaning of Over or Underpaid Tax Credit

After having to pay taxes, you will find that the tax payment is being confirmed. There’s a condition known as overpayment. This condition happens if you pay taxes with an wrong nominal value. If your tax due in a single year is lower than the tax credit amount billed to you, then you will get a refund or the remaining tax. This extra is called overpayment. The tax excess that you simply pay will be recalculated with sanctions from tax debt if any.

While underpayment is a condition where taxpayers still have tax payment dependents.

Important Things Before Returning Tax Credit

Returns or calculation of the excess tax must go through numerous stages before it is actually returned to the taxpayer. Listed here are the actions or things that should be thought about when the authorities determine the circumstances for overpayment:

The truth about income tax payable

Some individual or corporate taxpayers feel that the taxes enforced on them are too high, so they falsify data. Income tax is definitely one of the greatest taxes charged on tax payers. The authorities must thoroughly check out the taxpayer’s income tax track record before deciding the overpaying conditions.

The truth of proof of levies and tax breaks

When paying income taxes, there will be physical and digital proof. The authorities must analyze these data or validate the data before figuring out the overpayment conditions. Taxpayers must provide proof of payment of tax. The evidence of tax supplied should be strongly related the year to be looked over.

What is tax credit?
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What is tax credit?
What is tax credit? Tax credit is a computation of income tax that will be taken at the start of the period or already paid by the taxpayer.
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