income tax in India

In India, income tax is a tax levied by the central government on the income earned by individuals, companies, and other entities. The tax is governed by the Income Tax Act, 1961, and the tax collected is used for various government projects and social welfare initiatives.

The income tax in India is calculated based on the income earned in the previous financial year (April to March). The income tax rates for individuals depend on their income level and are divided into different tax slabs. The tax rates for the financial year 2022-23 (assessment year 2023-24) are as follows:

For individuals below 60 years of age:

>Income up to Rs. 2.5 lakh: No tax

Income between Rs. 2.5 lakh and Rs. 5 lakh: 5% tax

>Income between Rs. 5 lakh and Rs. 7.5 lakh: 10% tax

>Income between Rs. 7.5 lakh and Rs. 10 lakh: 15% tax

>Income between Rs. 10 lakh and Rs. 12.5 lakh: 20% tax

>Income between Rs. 12.5 lakh and Rs. 15 lakh: 25% tax

>Income above Rs. 15 lakh: 30% tax

For individuals between 60 and 80 years of age:

>Income up to Rs. 3 lakh: No tax

Income between Rs. 3 lakh and Rs. 5 lakh: 5% tax

>Income between Rs. 5 lakh and Rs. 10 lakh: 20% tax

>Income above Rs. 10 lakh: 30% tax

For individuals above 80 years of age:

>Income up to Rs. 5 lakh: No tax

Income between Rs. 5 lakh and Rs. 10 lakh: 20% tax

>Income above Rs. 10 lakh: 30% tax

There are also various deductions and exemptions available for individuals under the Income Tax Act, such as deduction for investments in certain schemes like Provident Fund, National Pension Scheme, etc.

It is mandatory for individuals and entities meeting certain income criteria to file income tax returns and pay income tax on time to avoid penalties and legal consequences.