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Okay, before we get into the specifics, let's get a handle on the Indian **income tax** system in general. The Indian **income tax** is levied by the Central Government on the income of individuals, Hindu Undivided Families (HUFs), companies, firms, and other entities. The rules and regulations governing **income tax** are laid out in the Income Tax Act, 1961. This act, along with various amendments and circulars, forms the backbone of the tax system. The **income tax** system is designed to generate revenue for the government, which is then used to fund various public services and development projects. This is how the country moves forward. The **income tax** is a progressive tax, meaning the tax rate increases as the income level rises. This ensures that those with higher incomes contribute a larger portion of their earnings to the government. The financial year in India runs from April 1st to March 31st. This is the period during which income is earned, and tax is calculated. The assessment year is the year following the financial year. It's during this time that you file your tax returns. For example, for the financial year 2023-24, the assessment year is 2024-25. Understanding these timelines is crucial for staying on top of your **income tax** obligations. Taxpayers are classified into different categories based on their income sources and types of entities. These categories include individuals, HUFs, companies, firms, and others. Each category has specific rules and regulations regarding **income tax** liabilities. In order to fulfill your **income tax** obligations, it is critical to keep up with these rules and regulations. This article will simplify those rules so you don't have to keep up with them as much.
