What is Income Tax Act, 1961

Income tax Definition

Payments made by individuals & corporations to Government based on their taxable income.

Income Tax on all types of income, other than agricultural income is charged and collected by the Central Government. The Income Tax Act, 1961 has been brought into force with effect from 1st April 1962. It applies to the whole of India.

Key words

• Income tax is the major source of Revenue for the Government.
• Income tax is a type of tax that governments impose on income generated by businesses and individuals within their jurisdiction.
• Income tax is used to fund public services, pay government obligations, and provide goods for citizens.
• The central government, many states, as well as local jurisdictions, require that income tax be paid.
• Personal income tax is a type of income tax that is levied on an individual’s wages, salaries, and other types of income.
• Business income taxes apply to corporations, partnerships, small businesses, and people who are self- employed.