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WHAT IS  INCOME TAX? WHAT IS INCOME TAX?

Bronze medal Reporter Adv.Sanu Mathew Posted 5 Oct 2019 Read More News and Blogs
WHAT IS  INCOME TAX?

An income tax is a tax that governments impose on income generated by businesses and individuals within their jurisdiction. The Income-tax Act, 1961 is the charging Statute of Income Tax in India Section 10(1) of the Income Tax Act, 1961 defines the power given to the Central Government to levy a tax on any income other than agricultural income. It consists of levy, administration, collection and recovery of Income Tax. The Constitution of India has already defined the power to the central government of India in schedule VII, Union List, entry 82. The Income Tax Law consists of Income Tax Act 1961, Income Tax Rules 1962, Notifications and Circulars issued by Central Board of Direct Taxes (CBDT), Annual Finance Acts and judicial pronouncements by the Supreme Court and High Courts. Income tax cases are dealing with income tax lawyers in India.

By law, taxpayers should file associate taxation to come back annually to work out their tax obligations. Income taxes are a source of revenue for governments. They are wont to fund public services, pay government obligations, and provide goods for citizens. Most countries use a progressive taxation system within which higher-income earners pay a better charge per unit compared to their lower-income counterparts. Individual taxation is additionally remarked as income tax and is levied on wages, salaries, and other types of income. This tax is sometimes a tax the state imposes. Because of exemptions, deductions, and credits, most individuals do not pay taxes on all of their income.


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The government imposes a tax dutiable financial gain of all persons who are individuals, Hindu Undivided Families (HUF's), companies, firms, LLP, an association of persons, the body of people, local authority and any other artificial juridical person. Levy of tax on a person depends upon his residential status. The CBDT administers the taxation Department, which is a part of the Department of Revenue under the Ministry of Finance, Govt. of India. Income tax is a key supply of funds that the government uses to fund its activities and serve the general public.


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Who has to pay income tax?

Income Range

Tax rate

Tax to be paid

Up to Rs.2,50,000

0

No tax

Between Rs 2.5 lakhs and Rs 5 lakhs

5%

5% of your taxable income

Between Rs 5 lakhs and Rs 10 lakhs

20%

Rs 12,500+ 20% of income above Rs 5 lakhs

Above 10 lakhs

30%

Rs 1,12,500+ 30% of income above Rs 10 lakhs

 





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