"tax relationship" taxable event taxable person

Meaning of Income Tax
‎Income tax is a compulsory financial contribution that individuals and entities must pay to the government based on their annual earnings. The revenue generated is the main source of government funding and is used for nation-building activities such as infrastructure development, healthcare, education, and national defense. 
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‎Characteristics of Income Tax
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‎Direct Tax: The burden of the tax falls directly on the person who earns the income and cannot be shifted to someone else.
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‎Progressive in Nature: India follows a progressive tax system, meaning the tax rate increases as the income level of the taxpayer increases, which helps to reduce income inequalities.
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‎Governed by Statute: Income tax law in India is primarily administered by the comprehensive Income Tax Act, 1961 and amended annually by the Finance Act passed in the Parliament.
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‎Annual Levy: Tax is charged on the income earned during a "previous year" (financial year) and is assessed and paid in the following "assessment year".
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‎Mandatory Filing: All eligible individuals and entities earning above a certain threshold are legally obligated to file an Income Tax Return (ITR) annually, declaring their income and tax liability

‎A source of income is the actual channel or activity from which an individual or business earns money. 
‎Examples: 
‎ • Salary from a specific employer.
‎ • Interest earned from a savings account or fixed deposit.
‎ • Commission received from sales.
‎ • Rental income from a particular property.
‎ • Profits from selling specific stocks or bonds. 
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‎The "heads of income" are the statutory classifications used for the structured calculation of total income for tax purposes. All sources of income must be categorized under one of the five heads. 
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‎Income from Salaries: This head covers all remuneration received from an employer under an employer-employee relationship, including basic pay, allowances (like HRA), bonuses, and pensions.
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‎Income from House Property: This includes rental income (or notional rent on self-occupied properties) derived from buildings or land owned by the taxpayer.
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Exempted income refers to specific types of earnings that are not subject to income tax under the relevant tax laws of a country. This income is not included in the calculation of an individual's total taxable income, though it may still need to be reported when filing tax returns. 
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‎Common Examples of Exempted Income (India)
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‎ • Agricultural Income: Any income derived from agricultural activities or land in India is fully exempt from tax.
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‎ • Life Insurance Proceeds: The maturity amount or any bonus received from a life insurance policy is exempt under Section 10(10D), provided the premium paid does not exceed a specified percentage (e.G., 10% or 20%) of the sum assured, depending on the policy issue date.

‎Agricultural income in India refers to revenue generated from specific agricultural activities on land located in India. Under the Income Tax Act, 1961, this income is fully exempt from central government income tax; however, it can influence the tax rate on other, non-agricultural income and may be subject to state-level taxes. 
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‎ • Rent or Revenue from Agricultural Land: Any income received in cash or kind from land that is situated in India and used for agricultural purposes.
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‎ • Income from Agricultural Operations: Income derived from carrying out basic and subsequent operations on the land, including tilling, sowing, weeding, harvesting, and processing the produce to make it fit for market.
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‎ • Income from Nurseries: Income from saplings or seedlings grown in a nursery is also considered agricultural income.