Anup singhIncome Tax Basics: In this article, we will learn the fundamentals of income tax. If you are interested, you can explore this topic with us!
What is Income Tax?
It is tax on income that anyone earn. Income can be of different types like Salary Income ( If you are doing job on payroll then it is salary income), Business income etc.
Types of Taxes
There are two types of taxes i.e. Direct taxes and Indirect taxes.
Direct Taxes: If tax is charged on directly on income or wealth of person is known as direct taxes. For e.g. Income Tax.
Indirect Taxes: If tax is charged on price of goods or services, then it is known as Indirect tax. For e.g. Goods & Service Tax (GST) or Custom Duty.
What is Financial Year?
It commence from 1st April and ends on 31st March. For e.g Current Financial Year starts from 1st April,2020 to 31st March, 2021.
What is Assessment Year?
Income earned in Financial Year 2020-2021 is taxable in Assessment Year 2021-2022. Means immediately following (next) year of Financial Year is Assessment year.
For e.g
| Financial Year | Assessment Year |
| 2017-2018 | 2018-2019 |
| 2018-2019 | 2019-2020 |
| 2019-2020 | 2020-2021 |
Income Tax Basics: The Income Tax Act of 1962 is a legislation that governs the taxation of income in India. It provides the legal framework and rules for the assessment, collection, and administration of income tax. In simple language, the act defines how individuals, businesses, and other entities are required to calculate and pay their taxes based on their income. It establishes the rates at which taxes are levied, outlines various deductions and exemptions available, and sets the procedures for filing tax returns. The act is regularly updated to incorporate changes in tax laws and to ensure clarity and fairness in the taxation system. Its main purpose is to ensure that income earned by individuals and businesses is taxed correctly and contributes to the overall revenue of the country.
Income Tax
Who is Assessee?
Assessee means a person by whom any tax or any other sum of money payable under this act. In addition, it also includes-
Assessee means a person by whom any tax or any other sum of money payable under this act. In addition, it also includes-
Heads of Income Under The Income Tax Act, 1961
What is Previous Year ? – Income Tax
Important Income Tax FAQs on Salary Income
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