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What is Income Tax In India

23rd February 2026

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Income tax in India is a direct tax that individuals, Hindu Undivided Families (HUFs), companies, firms, and certain other entities are required to pay to the government on the income they earn during a financial year. The Income Tax Act, 1961, and the Income Tax Rules, 1962, govern the levy, administration, collection, and recovery of income tax in India.

Here are some key points about income tax in India:

Residential Status: The liability to pay income tax in India depends on an individual's residential status, which is determined based on the number of days spent in India during the financial year and the preceding years.

Taxable Income: Income tax is levied on the total income earned by an individual or entity during a financial year. This income includes salary, income from house property, capital gains, profits from business or profession, and income from other sources.

Income Tax Slab rate In India

Tax Slabs: India has a progressive tax system with tax slabs for individuals based on their income levels. These slabs are subject to change as per the government's budget announcements. As of my last update, the tax slabs for individuals below 60 years of age were as follows:

Income up to ₹2,50,000: Nil

Income from ₹2,50,001 to ₹5,00,000: 5%

Income from ₹5,00,001 to ₹10,00,000: 20%

Income above ₹10,00,000: 30%

There may be additional surcharges and cess applicable depending on the income level.

Income Tax Deduction and Exemption

Tax Deductions and Exemptions: The Income Tax Act provides for various deductions and exemptions that individuals can claim to reduce their taxable income. These include deductions for investments in specified avenues such as Provident Fund (PF), Public Provident Fund (PPF), Equity Linked Savings Schemes (ELSS), National Pension System (NPS), payment of insurance premiums, tuition fees, etc.

Filing of Tax Returns: Individuals and entities whose income exceeds the prescribed threshold limit are required to file income tax returns with the Income Tax Department within the due dates specified by the government.

Owen Christ

Harry Ferguson is an author, blogger, and designer living in a suburb of Washington, DC. When he’s not designing, blogging, or writing, Ferguson can be found with his head in a book or pinning like a madman.

Edna Watson

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November 16, 2018 at 4:31 am
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Owen Christ

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November 19, 2018 at 4:31 am
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James Scott

November 13, 2018 at 4:50 am

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February 12, 2018 at 6:31 am
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1. Harry Ferguson
  
  February 13, 2019 at 4:51 am
  
  Thanks for always keeping your HTML Template up to date. Your level of support and dedication is second to none.
  
  November 13, 2018 at 4:31 am
  | Reply