Source: articlesbase.com
Personal income tax is a kind of tax system that is imposed on the personal earnings of an individual. A person pays his/her income tax on the basis of his annual payment he/she used to get as the salary or wage. In a general sense, an income tax is a tax imposed on the financial income of an individual, people or other legal entities. A personal or individual income tax is levied on gross annual income of the individual with some permitted deductions. Personal income tax usually collected on the end of every year with small or no amendments in tax structure.Most income of an individual in UK is subject to income tax deduction under the PAYE scheme that's an expedient personal income tax collection process for the Government. If you have interest received, your tax is usually deducted by the payer. PAYE method of tax payment allows your tax payments to be made automatically from your salary package if you are in job sector, thus dropping the hassle of excessive individual involvement in taxation process. However, in a case if you are self employed you need to fill out a self-assessment tax return at the end of each taxation period.In case if your tax is overpaid you may get the benefits of huge tax rebates however you may also opt for other allowances which you may be entitled for, to save a considerable amount of money in income tax payments. Income taxes are paid by persons of UK on the basis of the annual income. Taxes money is spent in the development of the country in each and every field. Hence every person like as business man or employee pays their taxes to the government.In UK, taxable personal income of an individual is not the same as his/her total income lies since all the taxpayers are permitted to enjoy a definite amount of tax-free income sometimes called a personal allowance and some are entitled to various additional allowances as well. The amount of personal income tax levied on an individual depends upon your earnings and your monetary status as well as the type of income he or she is receiving.On the completion of your Personal Income Tax period, State income tax Office contacts your employer to arrange that you need to pay. In some cases tax could be deducted directly from your earned income after the completion of taxation period.
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