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Income tax is a direct tax levy carried out by the government following the income of the people and other affected groups. It is one of the most important revenues of any state as it finds use in infrastructure and public services, among other government activities. To taxpayers, knowledge of the tax laws and policies governing tax income is important in compliance observation, maximization of tax savings, and obviation of possible legal repercussions. This article focuses primarily on the rules governing income tax, touching all the concepts, slabs of tax, deductions, filing requirements, a

Income tax is a levy demanded from the income of an individual and business organizations. The major portions of all jurisdictions collect it as a percentage of the income, though the rate varies with income ranges. Income tax becomes one of the biggest sources of income on which the governments of the world depend for public health, education, defence, and social welfare services.
Income tax generally includes:
• Earnings and salary, bonus, other income from employment,
• Income generated from business or self employment
• Properties, investments and capital gains
• The income of the s

Generally, income tax systems are progressive, meaning a high income earner has to pay a higher rate. Tax systems vary from country to country; however, often tax systems contain numerous tax slabs or brackets in them. In most of the countries, the individual is categorized under a specific tax bracket according to his annual income. For each slab, the rate is different.
Example: Individual taxpayer slabs in India
• Basic exemption limit: This is the most basic amount that appears to be of income, say INR 2.5 lakhs. This is completely exempt from tax.
• Income Tax Slabs
o 5% between INR

The rules of income tax group income into different classes and decide under what principles different types can be taxed in respect of their source and their nature. Of very common types of
• Income taxable, the following are mentioned: Salaries and Wages: This is generally the chief source of income for most people. Salaries are thus normally taxed through TDS as employers pay the salaries.
• Business or Professional Income: Tax is levied on the earnings of self-employed professionals and business people after deducting permissible business expenses.

• Capital Gains: Such incomes realized from assets sold constitute capital gains, either short-term or long-term depending on how long an asset had been held. Thus, the tax rates differ with the nature of capital gain.
• Rental Income of House Property: All the income accreted from the property let out also are taxable except for the expenditure allowed, which includes interest for a housing loan.
• Other Source: Such comprises of interest income, dividends, and every other passive source of revenue.
This is how the taxpayers might lead themselves by understanding as to how each income c