What is Income Tax ?

Editor December 31, 2021


Mine Tax Consultant





 An Income tax is a Direct tax paid by Taxpayer on income earned during a year . It is a tax forced on taxpayers in regard of the income or benefits procured by them. income tax generally is computed as the product of a tax rate times the taxable income. Taxation rates might fluctuate by type or qualities of the taxpayer and the kind of income. Income tax is a type of tax that the central government charges on the income earned during a financial year by the individuals and other person


Types of Taxpayers or Persons in Income Tax

  • Individuals
  • Hindu Undivided Family (HUF)
  • Association of Persons(AOP)
  • Body of Individuals (BOI)
  • Firms
  • Companies


Individual are further classified into different age group

  • Individuals less than 60 years of age
  • Individuals aged more than 60 but less than 80 years
  • Individuals aged more than 80 years


Heads Of Income


There are Five Heads Of Income which are

  1. Income earned from Salary - Income earned from salary and pension is taxable under this head of income
  2. Income from House Property-Income earned by renting a house property is taxable under this head of income.
  3. Income from Capital Gains-Surplus Income from sale of a capital asset such as mu shares, house property,mutual fund etc is taxable under this head of Income.
  4. Income from Business and Profession-Profits earned by self employed individuals, businesses or  income earned by professionals like  chartered accountants, doctors  are taxable under this head.
  5. Income from Other Sources-Income from  fixed deposits interest, winning in lotteries is taxable under this head.


Income Tax slab




Income Tax Return( ITR )
The taxpayer shall file an income tax return every year by ITR forms prescribed by the income tax department. Types of ITR form

  • ITR-1: Individuals (residents) having income from salary, one house property, other sources, agricultural income less than Rs 5,000 and with a total income of up to Rs 50 lakh
  • ITR-2: Individuals/HUFs not having any business or profession under any proprietorship
  • ITR-3: Individuals/HUFs having income from a proprietary business or profession
  • ITR-4: Individuals/HUFs having presumptive income from business or profession
  • ITR-5: Partnership firms or LLPs
  • ITR-6: Companies
  • ITR-7: Trusts

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