Income Tax Act 1961
In India Income tax is governed by the Income tax Act 1961. It was first came into force on 1-4-1962. Income tax Act is used for determination of taxable income, tax liability and also provides procedure for assessment, appeal, penalties and prosecutions.Every year Finance Act bring amendment to this Act. Income Tax Act Contain 298 sections and XIV Schedules.
Income Tax is charge on total income earned by every person during the relevant previous year.
Basic concept of Income Tax:-
a)Previous Year(sec. 3):- In Income tax Act the meaning of Previous year is "year in which income is earned" previous year is represented by PY.
b)Assessment Year(Sec.2(9)):- In Income tax Act the meaning of Assessment year is "year which start on 1-April and ending on 31-march"
c)Assessee(sec.2(7)):- Assessee means a person who paid or payable any sum of money under the income tax act 1961.
d)Person(sec.2(31)):- In income tax person is defined to includes:
i) an individual
ii) a Hindu undivided family
iii) a company
iv) a firm
v)an association of person and body of individuals
vi) local authority
vii) every artificial juridical person not falling within any of the above mentioned categories.
Heads of income
Types of Taxes