INCOME TAX

income tax is a very important direct tax. It is an important and most significant source of revenue of the government. The government needs money for to maintain law and order in the country, safeguard the security of he country from foreign powers and promote the welfare of the society. Income tax, being a direct tax is an important tool to achieve balanced regional growth by providing concessions and incentives in income tax in various developmental propose.

HISTORY OF INCOME TAX IN INDIA

1860:first introduced by sir James in order to meet losses sustained by the government

1886: separate tax law were passed by British government

1918: new income tax act passed to amend old one

1922: another income tax act passed

1962: first income tax act after the independence of India.

This act avoided the major complications in IT act 1922

this act applicable for all the states in India

1984: direct taxes amendment

1987: direct tax amendment act

1991: direct tax law

2009: direct tax code bill passed

BASICS OF CHARGES IN INCOME TAX

1. income tax is annual tax on income
2. income of previous year will charge on next assessment year
3. tax rate is fixed by finance act
4. tax is charged on every person defined by section2(31)
5. the tax is charged on the total income every person that computed by the provisions of law
6. income tax is to be deducted at source or paid in advance as provided under the provisions of the law.