Income Tax Act
The privision of Income Tax are contained in the Income Tax Act,1961 which extends to the whole of India and became effective from 1.4.1962.
Scope of Income Income Tax Act.
The Income Act contains various provision for determintion of taxable income detrmination of taxliability, procedure for assessment, appeals, penalties and prosecutions. It also lays down the powers and duties of various income-tax authorities in India.Since the Income tax Act 1961 is a revenue law there are bound to be amendments from time to time .Therefore, the Income Tax Act has undergone innumerable changes from the time it was originally passed.
Income Tax Act 1961 amendmentsare generally brought in annually through Financial Budget every year. The budget 2020 or 2021 is nothing but some changes made in the Income Tax Act. Every year a Budget is presented before the Parliament by the Finance Minister. One of the proposals of the central Government for the next financial year.
The Finance Bill mentions the rates of income tax and other taxes which are given in the various Schedule attached to such Finance Bill. The First Schedule read with section 2 of the Finance Bill gives the rates of income tax in three parts.
Part-I It gives the normal rates of income tax for various assessees for the current assessment year e.g the Finance Act 2020 had given the rates of income tax for the assessment year2020-21.
Part-II It gives the rates for deduction of tax at source from the income earned in the current financial year e.g the finance Act,2021 has given the rates at which tax is to be deducted at source in the financial year 2021-22
Part-III: It gives the normalratesfor calculating income tax for deducting tax from income chargeable underthe head Salaries. The same rates are applicable for computation of advance tax to be paid in the current financial year for incomes taxable at normal rates e.g Finance Act,2021 had given the rates for the computation of advance tax for thefinancial year2021-22.
Income Tax Act 1961 is a law under which income is determined in respect of income earned during the relevant previous by an assessee.