Income Tax Act Overview

A tax system where every consumer contributes equally, regardless of their financial capability. It can lead to unfair burdens on individuals with limited resources.

The central government in India has the sole authority to create laws related to the matters listed in the Union List.

The state governments in India have the exclusive authority to create laws for the matters listed in the State List.

Both the central and state governments in India share the authority to create laws for matters listed in the Concurrent List.

A tax that is levied on a person's income, which includes salaries, wages, and profits.

The system of collecting taxes in ancient India was based on contributions in the form of gold coins, cattle, grains, and raw materials, levied by the ruling kings.

The Income Tax Act of 1961 established the legal framework for income taxation in India.

James Wilson, the Finance Member of the British government, introduced income tax for the first time in India in 1860.

A set of laws that governs the levy of income tax in India. Enacted in 1961 and came into force on April 1st, 1962. It's comprised of 298 sections and 14 schedules.

An annual law which introduces amendments to the Income-tax Act, 1961 and other tax laws. It's passed by the Parliament and gets presidential assent.

Regulations for the effective administration of the Income-tax Act. These are made by the Central Board of Direct Taxes (CBDT).

These are guidelines issued by the CBDT to clarify doubts and provide direction about provisions of the Income-tax Act.

These are pronouncements by the CBDT that specify the specific details related to the Income-tax Act.

These are legal cases related to the Income-tax Act, which provide precedents and interpretations of the law.

Every person who earns income is generally liable to pay income tax, subject to specific conditions and exemptions.

The Income Tax law is comprised of a set of components including the Income-tax Act, Finance Act, Income Tax Rules, Circulars/Notifications, and Legal Decisions. These components work together to provide guidance and clarity on income tax matters.

The total income received by an individual, company, or other entity before any deductions or exemptions.

The portion of Gross Total Income that is subject to income tax after accounting for deductions and exemptions.

The amount of tax that is levied on Net Taxable Income. It is calculated using the Income Tax Slab Rates.

A deduction from tax liability granted to individuals based on their income level, with the goal of providing relief to lower-income earners.

An additional tax charged on individuals exceeding a certain income threshold, calculated as a percentage of the tax payable.

A tax levied on the total tax liability, calculated as a percentage of the tax payable.

The final amount of income tax payable after taking into account all applicable deductions, exemptions, rebates, surcharges, and cess.

The difference between the total tax liability and tax already paid during the year. It can be either a refund (if tax paid is more than liability) or an additional tax payable (if tax paid is less than liability).

A surcharge is an additional tax levied on top of the regular income tax. It's applied when a person's income exceeds a certain threshold and aims to increase the tax burden on higher earners, leading to a higher overall tax payable.

The rate of surcharge is determined based on the level of total income. The higher the income, the higher the surcharge rate. These rates are fixed by the tax laws.

The surcharge is levied on the income tax computed on either the dividend income and capital gains or a portion of the total income, depending on the specific case and tax rules.

The surcharge on dividend income and capital gains is calculated at a flat rate that does not exceed 15% of the income tax payable on that portion. This cap applies to the specific income components.

The surcharge on other income of 6 crores is calculated at a flat rate of 37%, specifically when the total income exceeds 5 crores. This applies only to a specific income range.

For Associations of Persons (AOPs), different surcharge rules apply based on their Net Total Income (NTI) and whether they are composed solely of companies.

A surcharge of 10% or 15% applies to AOPs with Net Total Income (NTI) exceeding 50 lakhs and 1 crore respectively. For AOPs solely composed of companies, higher NTI triggers higher surcharge rates.

Surcharge on higher income helps generate additional revenue for the government, potentially funding important infrastructure projects, social welfare programs, or reducing the budget deficit.

This regime offers lower tax rates on income up to ₹10 lakh. It also includes a rebate for individuals and non-trust entities with income up to ₹5 lakh.

This regime applies higher tax rates after a certain income limit, along with a surcharge for higher income ranges.

This tax rate applies to income between ₹3 lakh and ₹6 lakh under the concessional tax regime.

This tax rate applies to income above ₹10 lakh under the optional tax regime.

A surcharge is levied on those who earn above a certain limit.

A surcharge is applicable when your total income exceeds ₹50 lakh. It is a percentage of your income tax and increases with higher income.

A surcharge on income tax is applied when your total income exceeds ₹50 lakh. The surcharge percentage increases as income increases.

A set of deductions allowed for certain scientific research expenses. This includes specified business expenditures, agricultural extension projects, skill development projects, and other deductions under Part C of Chapter VIA of the Income Tax Act, excluding Section 80JJAA.

A mechanism designed to prevent a significant jump in tax liability when an assessee's income crosses a specific threshold. This ensures that the increase in tax payable does not exceed the increase in income.

The difference in tax liability between two consecutive income brackets, where the increase in tax is calculated on the portion of income falling into the higher tax bracket.

The calculation of tax liability when a person's total income crosses a specific threshold. This involves determining both the increase in income and the corresponding increase in tax plus surcharge.

The Income Tax Act mandates rounding off total income to the nearest multiple of Rs. 10 and total tax to the nearest multiple of Rs. 10.

An individual whose 60th birthday falls on April 1st of a particular year is considered to have attained the age of 60 in the previous financial year. This makes them eligible for a higher basic exemption limit of Rs. 300,000 for the current assessment year.

A default tax regime under Section 115BAC that allows for a flat tax rate of 25% on total income for individuals and Hindu Undivided Families (HUFs).

Tax liability calculations for a domestic company considering its total income, turnover, and the option to choose either the default tax regime (Section 115BAC) or the old tax regime.