Browsing: Income Tax

Income tax is a direct tax imposed by governments on the earnings of individuals and businesses. It serves as a primary source of revenue for funding public services such as healthcare, education, infrastructure, and national security. In India, income tax is governed by the Income Tax Act, 1961, and is levied based on income slabs, with higher earners paying a greater percentage. Taxable income includes salaries, business profits, rental income, capital gains, and other sources. Individuals and businesses must file Income Tax Returns (ITR) annually to report their earnings and claim deductions, ensuring compliance with tax laws.

Income tax systems vary across countries, with some following a progressive tax structure, where higher-income individuals pay a larger share, while others implement flat or proportional tax rates. Governments offer various deductions and exemptions to encourage savings and investments, such as health insurance, home loans, and retirement funds. Tax authorities enforce compliance through audits and penalties for non-payment or misreporting. As tax regulations evolve, digitalization and automation have streamlined tax filing, making it more accessible and efficient for taxpayers worldwide.