An income tax is a tax that governments impose on Income generated by individuals and businesses within their jurisdiction. Income Taxes are a source of revenue for governments. These income tax are used to pay government obligations, fund public services, and provide goods for citizens. As per the law, taxpayers must file an Income Tax Return annually to determine their tax obligations.
Income Tax is tax that's payable on an individual's income. It's charged at different rates depending on what kind of income it relates to. In India, the income tax is charged annually at the end of each financial year (April – March).
Some of the common income tax deductions are:
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According to the Indian Income-tax Act, 1961, the following parties are liable to pay the income tax, provided their annual income falls into one of the income slabs as prescribed in the Act:
There are several reasons why income tax is important:
Overall, income tax is an important tool for governments to fund public services and programs, promote fairness and redistribution of wealth, encourage economic growth, and address social and environmental issues.
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