Income Tax

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Income tax is a direct tax levied by the government on the income earned by individuals, corporations, or unincorporated businesses etc during a financial year. In India, it is paid to the Central Government and is governed by the Income Tax Act 1961.

As per the Income Tax Act 1961, an assessee (a person who pays tax or any other amount of money under the Income Tax Act) will be charged a prescribed income tax rate beyond the income exceeding the maximum exemption limit.

Income Heads

For taxation purpose, incomes are categorized into 5 different heads

• Income from Salary
• Rental Income
• Income from Business and Profession
• Capital Gains
• Income from other sources

In India every assessee is given a unique PAN (personal account number) with 10 characters allotted by the Income Tax Department. This is a permanent number and does not change with change in address or the assessing officer etc.

The taxation slabs and other rebates and deductions keep changing in different financial years.

The Government of India is undertaking various steps and measures to ensure the ease of an assessee while filing returns. There are different forms available for individuals / business firms / corporations etc.