Income tax can be understand as the tax which is levied on the personal income. It is imposed on the individuals varies with the income or profit of the taxpayer. Tax paid by companies is sometime referred as corporate tax or company tax. Tax increases with the increase in income
Tax is a mandatory payment made to the government, when the amount which is to be paid is the percentage of income is known as income tax. When we pay to the government the value of goods manufactured it is called Excise duty, when it is a percentage of goods entering into the country it is called Stamp Duty, when it is a Percentage of Goods Sold it is Called VAT, and when we pay the percentage of our income it is called Income Tax.
The critical word which is must to understand is Income, income from the point of view of Income Tax. The truth is that Income for the purpose of Income Tax includes all the money coming in excluding few exception such as loans and gifts.
Taxes are to be paid so that government can use that fund to provide the better services to us.
The Word tax is derived from the Latin Word ‘Taxo’ which means that it is financial charge imposed upon a taxpayer by a state or a legal entity failing of which may lead punishable by law.
Tax in India is paid on the basis of percentage of income decided by the central government every year in the annual budget.
For this year the income tax has been reduced from 10% to 5% for the income for Rs. 2.5 lakh to Rs. 5 lakh. The income tax for the income from Rs. 5 lakh to Rs. 10 lakh is 20% and the income above Rs. 10 lakh is 30%.
Above given is the rate of % of income to paid by the tax payer in the year of 2016-2017.