What is the subject of Income Tax? Who has to pay income tax? Please provide detailed...

What is the subject of Income Tax? Who has to pay income tax? Please provide detailed information

Expert Solution

A tax is a compulsory payment levied by government on incomes, capital gains and business profit.

Tax is a bridge that reduces the gap between poor and rich. Rich pays an amount out of their incomes and profits to government, government provides facilities to poor .

Though there are different types of taxes but one such tax is income tax.

An income tax is a tax charged by government from individual on their respective incomes and profit.

It is generally as a rate. For eg tax rate is 20 % and individual income is 100000 then individual needs to pay 20% of its income which is 20,000.

A point worth mentioning is that tax rate also varies according to the band of income. For a hypothetical Instance Individual earning less than 200000 should not pay tax.

People earning from USD 200000- USD 5,00,000 should pay 10% of their income.

Similary tax rate varies for different level of income.

As it is aforementioned in the hypotheical example that people earning less than 200000 need not pay tax which means people are not supposed to pay taxes if their income do not crosses a certain threshold. In literal opposite meaning people pay income tax when their income crosses a certain threshold level.

All the best.

In case of any query feel free to leave your doubt in comment section. ::))

Rahul Sunny answered 8 months ago

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