WHAT IS INCOME TAX?
Income Tax refers to the tax levied by the government for financing its various operations. It is counted on an annual basis, of the income earned in the previous year, also called the Assessment Year.
In simple language previous year (Assessment year) is the financial year in which the income is earned with profit. The earnings earned in the course of this previous year is charged to tax in the assessment year. The charge of Income Tax in India is executed according to the provisions made under the Income Tax Act. Income Tax additionally works as an economic stabilizer that aids in distributing wealth among people equally.
According to India tax laws earnings from the following resources is deemed taxable:
- Earnings from property
- Profits of enterprise or professions
- Capital gains
- Income from other sources