Income tax in India: An Overview
Income tax is a direct tax imposed on the income of a person. It is taxed at slab rates. The income & tax is disclosed by the income tax return.
The Income Tax is the charges levied by the government on the income of a person. It is a direct tax whose burden to pay cannot be shifted to any other person. Income tax is governed by the Income Tax Act, 1961 in India. Income Tax is charged as per the slab rates prescribed in the Union budget every financial year. It is charged differently for different individuals like individuals, partnership firm, company, etc. The primary sources of income as per income tax are:
- Income from Salary;
- Income from House Property;
- Profits and Gains of Business or Profession;
- Capital Gains Income; and
- Income from Other Sources
Income tax provides various deductions from income before computing the tax on income.
A clear picture of the income earned by a person and the income tax charged has to be provided through the income tax returns. Income tax return is a statement showing the status of a person, all the sources of revenue, the deductions and lastly the tax payable or tax refund (if any). Various types of return are there for each kind of person.