Introduction Income tax is one of the most important financial contributions made by individuals and businesses in India. Many people often wonder—why does income tax exist? And where does our money actually go? Understanding the purpose of income tax helps build awareness about how a country functions and develops. What is Income Tax? Income tax is a direct tax imposed by the Government of India on the income earned by individuals, businesses, and other entities. It is governed by the Income Tax Act, 1961, and collected by the Income Tax Department under the supervision of the Central Board of Direct Taxes.
Introduction
Income tax is one of the most important financial contributions made by individuals and businesses in India. Many people often wonder—why does income tax exist? And where does our money actually go?
Understanding the purpose of income tax helps build awareness about how a country functions and develops.
What is Income Tax?
Income tax is a direct tax imposed by the Government of India on the income earned by individuals, businesses, and other entities.
It is governed by the Income Tax Act, 1961, and collected by the Income Tax Department under the supervision of the Central Board of Direct Taxes.