Individual income tax is considered the most significant tax in the country. All persons receiving official income are forced to pay it. It is charged on salaries, dividends or other cash receipts recorded in an official manner. Therefore, each person planning legal work should know how the tax on personal income is calculated and paid. If this process is not completed in a timely manner, this becomes the basis for bringing violators to administrative responsibility, therefore significant fines and penalties are charged. The amount of the fee is fully controlled by law, since it is the federal authorities that determine the size of the tax rate, tax period and other parameters.
Tax concept
PIT is considered a significant fee, which is paid to the state budget by each officially employed person. The tax on income of individuals is transferred not only to employees, but also to the heads of companies, shareholders, government employees or specialists related to the self-employed population.
A fee is levied solely on the income of citizens, and persons themselves may have different statuses. Therefore, pay personal income tax:
- residents of the country, who may be Russian citizens or foreigners, staying on the territory of the Russian Federation for more than 183 days;
- non-residents with foreign citizenship, but at the same time engaged in entrepreneurial activities in Russia, therefore, make a profit in the country.
To calculate this fee, standard rates are used, which are set depending on the status of taxpayers. For employees, taxes on personal income are paid by employers. Individual entrepreneurs must calculate and transfer payments themselves, but for company executives this process is carried out by hired accountants.
What is the fee charged?
Initially, you should understand what is the object of taxation. Individual income tax is levied and calculated only from certain types of income, which include:
- Funds received as a result of the sale of various property owned by a citizen for less than three or five years. Three years applies to values that were transferred to a person in property on the basis of gratuitous transactions, for example, when forming a donation or transferring an object by inheritance. Five years (from 2016) applies to items purchased at their own expense.
- The profit received as a result of renting a certain property, and the process must be carried out legally, therefore, it is required to register the lease in Rosreestr.
- Salary, allowances, bonuses and cash incentives received by a citizen at official work.
- Dividends paid by different companies to all holders of securities.
- Gifts worth over 4 thousand rubles. in year.
- Other types of income.
But at the same time, there are some types of income that are not levied on personal income tax in the Russian Federation.
What revenue is not charged?
The fee for certain types of income is not calculated. These include:
- money received as a result of the sale of a property owned by a person for more than three or five years;
- funds inherited from a deceased relative;
- income received as a result of making a gift, and these funds should be transferred exclusively between relatives;
- numerous state benefits, but the exception is temporary disability benefits;
- pensions;
- remuneration provided to donors;
- numerous types of compensation;
- child support that may be paid on children, parents or dependents;
- grants received by a citizen in support of the educational sphere or science, culture or art;
- bonuses that may be awarded by Russian or foreign authorities if there are any scientific, cultural or other types of achievements;
- material help;
- income received from the sale of various products obtained as a result of the management of a subsidiary farm;
- scholarships received by students, various doctors, graduate students or other citizens who are studying or working in educational institutions;
- sports prizes presented in cash or gifts in kind;
- IE working in simplified modes.
All types of income from which personal income tax is not levied are listed in Art. 217 Tax Code.
What is the bid used for?
When calculating any type of fee, the rate set by state authorities should be taken into account. Individual income tax rates differ significantly depending on the status of the taxpayer. Accordingly, they will be different for different payers.
- 9% - this rate is applied when calculating the tax on personal income from dividends, if they were received before 2015. Additionally, this includes income received by the founders of trust management.
- 13% - used in relation to residents and non-residents of the Russian Federation. Such a rate on personal income tax is standard, since it is used in calculating salary fees, various remuneration, bonuses, surcharges, income from the sale of real estate or other types of cash receipts. This rate is also used for non-residents who work in the Russian Federation under an employment contract, as qualified specialists, as part of a program that assists in the voluntary resettlement of compatriots, and also when working as a crew member of ships flying the Russian flag.
- 15% - this rate is applied when dividends are received by non-residents from Russian companies.
- 30% - other income of non-residents is taxed at this rate.
- 35% - applies to several specific incomes. These include various winnings and prizes, interest on bank deposits, if they exceed a strictly established value, income derived from savings on interest or for the use of money by members of credit cooperatives.
Citizens who are hired workers should not independently engage in settlements, since for them this process is implemented by the employer. But they can independently verify the correctness of the calculations, so they should know what rate is used for this.
What deductions apply?
When determining the tax base, it is allowed to use different deductions. They are presented in several varieties. If deductions are used for personal income tax, they significantly reduce the tax base. They can be standard, social, professional or property.
If one taxpayer can count on several standard deductions at once, then only one, but the maximum one, is used for the calculation. An exception is deductions for children, which are provided without taking into account other benefits.
Procedure and terms of payment of the fee
It is tax agents that must deal with the calculation, deduction and transfer of personal income tax to the Federal Tax Service. These agents are employers or companies paying dividends to shareholders. Additionally, here under Art. 226 and Art. 227 of the Tax Code include specialists in private practice.
Agents are also branches or representative offices of foreign companies operating in the territory of the Russian Federation and arranging for the official work of Russian specialists. This leads to the fact that Russian citizens receive a certain income from which personal income tax should be paid.
Should I file a declaration?
If there are incomes for which citizens themselves must calculate and pay a fee, then they must also prepare a declaration. For this, form 3-NDFL (personal income tax) is applied. She must be prepared and surrendered to the Federal Tax Service by April 30 of next year.
Filling it is quite simple, since only reliable data from official documents are entered. When filling out the tax return of personal income tax, the requirements and recommendations are taken into account:
- can be filled in manually or on a computer;
- the document can be transmitted personally when visiting the branch of the Federal Tax Service, by mail or via the Internet, and it is also allowed to use the help of a representative with a notarized power of attorney;
- all information is entered in strictly designated lines;
- the document must contain information about the income received, as well as the correct calculation of the fee itself;
- it is optimal to use special programs issued directly by the Federal Tax Service for preparing a declaration.
If any violations are detected, you will have to quickly redo the document. You can fill out a tax on personal income tax with the help of invited specialists. In this case, it is enough just to give them the necessary information to fill out the document.
The 3-NDFL declaration on taxes on personal income is required to be prepared independently if the money was received not at work, but as a result of the lease or sale of real estate. If strict deadlines are violated, this will lead to the fact that the taxpayer will be held administratively liable, so he will have to pay significant fines. When filling out a tax on personal income tax, one should not forget about possible deductions that a citizen can apply to reduce the tax base.
When is a declaration required?
The need for the formation of this document arises for individuals who have received different types of income. This is usually required upon receipt of funds submitted:
- remuneration received from citizens or companies that do not act as personal income tax agents;
- profit from the sale of various real estate that belonged to a person less than three or five years;
- receiving money from various foreign sources;
- rewards that a person received in the presence of heir status;
- profit represented by gifts, cars, real estate, shares or other valuables received as a gift.
In addition, a declaration is required to be prepared for entrepreneurs working under the DOS, as well as for people with private practice. If a person needs to return the previously paid personal income tax, then he will also have to submit a declaration to the department of the Federal Tax Service on his own.
How is the calculation performed?
To determine the correct amount of tax should determine the rules of calculation. For this, the standard formula is used: tax base * tax rate. When determining the base, it is recommended to first reduce the amount of income by deductions.
If you understand the rules for calculating personal income tax, you can verify the correct determination of the fee by employers or employees of the Federal Tax Service.
Calculation Example
For example, a woman receives a monthly salary of 42 thousand rubles. It is important to determine how much money the employer pays per month as personal income tax. Since there is a standard salary, the usual rate of 13% is used.
The amount of tax is: 42,000 x 13% = 5460 rubles. By withholding monthly PIT, income will be equal to: 42,000 - 5460 = 36,540 rubles.
Thus, it’s quite simple to understand the rules for calculating personal income tax. Personal income tax is levied on a monthly basis, but it is not required to engage in settlements on a monthly basis, since this obligation lies with the tax agent represented by the employer.
When do I need a 2-personal income tax certificate?
This document is compiled by each company, and then transferred to the Federal Tax Service. In addition, a 2-NDFL certificate (on personal income taxes) is often required by citizens themselves, for example, when applying for loans or obtaining a property deduction.
This certificate contains all the information about the income received by the citizen, as well as the listed taxes to the Federal Tax Service.
This certificate of personal income tax includes information on:
- companies where the taxpayer is officially employed;
- directly to the citizen;
- income received in the company, which is charged 13%;
- tax deductions granted;
- correct calculations of cash receipts, deductions and fees.
This information is used to prepare a 3-personal income tax return. Help can be generated in a different amount of time, but most often a document is required for a year of work. If a citizen leaves the main place of employment, the employer issues a certificate for the last three years.
By default, this document is prepared literally in one day, but it is valid for one month, so often when applying for a mortgage or other major loan, you need to get a certificate several times in a short period of time.
Will progressive taxation be introduced?
Various news constantly appear, on the basis of which it is planned to increase personal income tax or completely change the rules for its calculation. Officials are considering the possibility of levying a progressive tax on personal income. Personal income tax in this case will be calculated and paid individually by each citizen.
It is planned in the near future to increase the personal income tax rate, and it is expected that a progressive system for calculating the fee will be introduced. It lies in the fact that the rate will depend on the income of the citizen. Moreover, a maximum of 20% may be levied on cash receipts.
The progressive system assumes that the rate will vary depending on the size of the taxpayer’s income. This is considered fair, since people who receive low wages will still pay 13%, but if a person has a significant cash income, then the personal income tax rate will be high. This is considered fairer, and will also allow such a system to control the state's income of citizens.
But a progressive system has many drawbacks. These include the fact that citizens will have a reduced incentive to work, as well as people will try in various ways to reduce their official income. Additionally, citizens will significantly decrease their savings. Therefore, accurate information on the introduction of such a system is not yet available, but if it is implemented, it will lead not only to positive results, but also to minuses for the state.
Conclusion
Thus, personal income tax is a significant type of fee paid from all incoming income. It is usually calculated by tax agents represented by employers or companies paying dividends on shares. But at the same time, such incomes often arise, for which citizens have to report independently. To do this, they must not only correctly calculate the size of the fee, but also draw up a declaration in the form of 3-personal income tax, which is then submitted until April 30 to the department of the Federal Tax Service.
Tax evasion or late submission of a declaration is the basis for bringing citizens to administrative responsibility, therefore fines are charged that increase the amount that the state will have to pay in any case. Therefore, each taxpayer should be well versed in the rules for calculating and transferring tax, as well as in the nuances of the formation and delivery of reports.