Income tax
Income tax

Income tax is a very important direct tax. It is an important and most significant source of revenue of the government. The government  needs money to maintain law and order in the country; safeguard the security of the country from foreign power and promote the Welfare of the people. Since our government is better to socialistic pattern of society it is foremost duty of the government to bring out such welfare and development programs which will bridge the gap between the rich and the poor. All this requires mobilisation of funds from various sources.  The sources may be direct or indirect. Income tax being a direct tax,  is an important tool to achieve balanced socio-economic growth by providing concessions and incentive in income tax of various development purpose. 

Who is liable to pay income tax

 Every person,  whose taxable income for the previous financial year exceeds the minimum taxable limit is liable to pay income tax during the current financial year on the income of the previous financial year at the rates in force during the current financial year. 

The total income is computed on the basis of the residential status of the assessee.  The income is classified into the following five heads:

  1. Income from salaries;
  2. Income from House Property;
  3. Profits of Business Or Profession
  4. Capital Gains; and 
  5. Income from other Sources.