The Income-tax Act, 1961 is the changing Statute of Income Tax in India. It provides for levy, administration, collection and recovery of Income Tax. The Government of India brought a draft statute called the "Direct Taxes Code" intended to replace the Income Tax Act,1961 and the Wealth Tax Act, 1957. However the bill was later scrapped.
The Government of India presents finance budget every year in the month of February. The finance budget brings various amendments in income tax act,1961 including tax slabs rates. The amendments are generally applicable to the next following financial year beginning from 1 April unless otherwise specified. Such amendments become part of the income tax act after the approval of the president of India. "The Taxation Laws (Second Amendment) Act, 2016" is an amendment Act, No.48 of 2016, to Income-tax Act, 1961 and The Finance Act, 2016. It was passed during the 2016 Winter Session of Indian Parliament. The Taxation Laws (Second Amendment) Bill, 2016 was passed in Lok Sabha as a money bill on 29 November 2016 enabling people to declare their undisclosed incomes after Indian 500 and 1000 rupee note demonetisation.
Income Tax including surcharge (if any) & cess is charged for any person at the rate as prescribed by Central Act for that assessment year. Income-tax Act has provided separate provisions with respect to levy of tax on income received in advance as well as the income with respect of which the amount has not yet been received. A person also has to keep track of his TDS deducted while calculating his final tax liability at the end of the year.
Every income arising to any person will always be classified under one of the following headers provided by the Act:-
