One of the many common misconceptions about income tax is that 'the government taxes all the money we have.' So it's not like that at all! This is a misunderstanding and we can call it 'economic illiteracy'. Here you can feel the illiteracy of common people regarding money.
 |
| If i Put The Money in The Bank Once After Paying income Tax, Will i Have To Pay Tax On it Again Next Year? |
So let's get rid of this financial ignorance or economic illiteracy!
The government taxes your income for the financial year, not the money or wealth you have accumulated over the years. That is why it is called 'income Tax' or 'Aay Kar'! (ikar) Tax is levied on your overall income for a financial year, not on the money in the bank.
If the money is kept in the savings account, it earns interest, that is, here the money will get some income in the form of interest. Income tax which is levied is levied on income, so this time the interest income will definitely be taxed. But the principal will not be taxed.
Of course it also depends on the total interest income for the financial year. If it is more than the exemption limit of income tax, tax will definitely be levied.