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2. Introduction of Income Tax
An income tax is a tax imposed on individuals or
entities (taxpayers) in respect of the income or
profits earned by them (commonly called
taxable income). Income tax generally is
computed as the product of a tax rate times the
taxable income. Taxation rates may vary by type
or characteristics of the taxpayer and the type of
income.

4. Definition of Income Tax
• Income tax is a type of tax that governments
impose on income generated by businesses and
individuals within their jurisdiction.
• Income tax is used to fund public services, pay
government obligations, and provide goods for
citizens.
• Personal income tax is a type of income tax that
is levied on an individual's wages, salaries, and
other types of income.

5. Various Heads of Income Tax
• Salary
• House Property​
• Capital Gains​
• Business/Profession
• Other sources

6. Salary
Salary is defined to include:
a) Wages, Annuity, Pension, Gratuity.
b) Fees, Commission, Perquisites, Profits in lieu of
or in addition to Salary or Wages.
c) Advance of Salary, Lease Encashment.
d) Annual accretion to the balance of Recognized
Provident Fund.
e) Transferred balance in Recognized Provident
Fund.
f) Contribution by Central Government or any
other employer to Employees Pension Account
as referred in Sec. 80CCD.

7. Points to be Consider about Salary
a) Salary income is chargeable to tax on “due
basis” or “receipt basis” whichever is earlier.
b) Existence of relationship of employer and
employee is must between the payer and
payee to tax the income under this head.
c) Income from salary taxable during the year.

8. House Property
Income from house property shall be taxable
under this head if following conditions are
satisfied:
a) The house property should consist of any
building or land appurtenant thereto;
b) The taxpayer should be the owner of the
property;
c) The house property should not be used for the
purpose of business or profession carried on
by the taxpayer.

9. Capital Gains
Capital gains shall be chargeable to tax if
following conditions are satisfied:
a) There should be a capital asset. In other
words, the asset transferred should be a
capital asset on the date of transfer;
b) It should be transferred by the taxpayer
during the previous year;
c) There should be profits or gain as a result of
transfer.

10. Meaning of Capital Assets
Capital Asset is defined to include:
a) Any kind of property held by an assessee,
whether or not connected with business or
profession of the assessee.
b) Any securities held by a FII which has
invested in such securities in accordance with
the regulations made under the SEBI Act,
1992.
Capital Assets are of two types:- Short and Long
Term Capital Asset.

11. Business/Profession
The following incomes are chargeable to tax under the head
Profit and Gains from Business or Profession:
a) Profit and gains from any business or profession carried
on by the assessee at any time during the previous year.
b) Profit on sale of a license granted under the Imports
(Control) Order 1955, made under the Import Export
Control Act, 1947
c) Cash assistance (by whatever name called) received or
receivable by any person against exports under any
scheme of Government of India
d) And many other chargeable to tax

12. Other Sources
Any income which is not chargeable to tax under
any other heads of income and which is not to
be excluded from the total income shall be
chargeable to tax as residuary income under the
head “Income from Other Sources”.

13. Basis of Charge
a) Dividends.
b) Income by way of winnings from lotteries,
crossword puzzles, races including horse races,
card games, gambling or betting of any forms.
c) Interest on securities, if not taxable under the
head ‘Profits and Gains of Business or
Profession’.
d) Interest received on compensation or
enhanced compensation.
e) And many other.

14. Tax Slabs
• Individuals & HUFs can opt for the existing tax regime
or the new tax regime (with lower rate of taxation)
(u/s 115 BAC of the Income Tax Act).
• The taxpayer opting for concessional rates in the new
tax regime will not be allowed certain exemptions
and deductions (like 80C, 80D, 80TTB, HRA) available
in the existing tax regime. The option can be
exercised for every previous year where the
Individual or the HUF has no Business Income.
• For a person having Business Income, once the
option to be taxed under the new tax regime has
been exercised for a previous year, shall be valid for
that previous year and all subsequent years till the
business continues to exist.

15. Existing Tax Regime New Tax Regime
u/s 115BAC
Income Tax Slab Income Tax Rate Income Tax Slab Income Tax Rate
Up To Rs 2,50,000 Nil Up To Rs 2,50,000 Nil
Rs 2,50,001 to
5.00.000
5% above Rs
2,50,000
Rs 2,50,001 to
5,00,000
5% above Rs
2,50,000
Rs 5,00,001 to
10,00,000
Rs 12,500 + 20%
above Rs 5,00,000
Rs 5,00,001 to
7,50,000
Rs 12,500 + 10%
above Rs 5,00,000
Above 10,00,000 Rs 1,12,500 + 30%
above Rs 10,00,000
Rs 7,50,001 to
10,00,000
Rs 37,500 + 15%
above Rs 7,50,000
Rs 10,00,001 to
12,50,000
Rs 75,000 + 20%
above Rs 10,00,000
Rs 12,50,001 to
15,00,000
Rs 1,25,000 + 25%
above Rs 12,50,000
Above 15,00,000 Rs 1,87,500 + 30%
above Rs 15,00,000
For Individual (Resident or Non-Resident) less than 60 years of
age anytime during the previous year:

16. For Individual (Resident or Non-Resident), 60 years or more but
less than 80 years of age anytime during the previous year:
Existing Tax Regime New Tax Regime
u/s 115BAC
Income Tax Slab Income Tax Rate Income Tax Slab Income Tax Rate
Up to Rs 3,00,000 Nil Up to Rs 2,50,000 Nil
Rs 3,00,001 - Rs
5,00,000
5% above Rs
3,00,000
Rs 2,50,001 - Rs
5,00,000
5% above Rs
2,50,000
Rs 5,00,001 - Rs
10,00,000
Rs 10,000 + 20%
above Rs 5,00,000
Rs 5,00,001 - Rs
7,50,000
Rs 12,500 + 10%
above Rs 5,00,000
Above Rs 10,00,000 Rs 1,12,500 + 30%
above Rs 10,00,000
Rs 7,50,001 - Rs
10,00,000
Rs 37,500 + 15%
above Rs 7,50,000
Rs 10,00,001 - Rs
12,50,000
Rs 75,000 + 20%
above Rs 10,00,000
Rs 12,50,001 - Rs
15,00,000
Rs 1,25,000 + 25%
above Rs 12,50,000
Above Rs 15,00,000 Rs 1,87,500 + 30%
above Rs 15,00,000

17. Individual (Resident or Non-Resident) 80 years of age or more
anytime during the previous year:
Existing Tax Regime New Tax Regime
u/s 115BAC
Income Tax Slab Income Tax Rate Income Tax Slab Income Tax Rate
Up to Rs 5,00,000 Nil Up to Rs 2,50,000 Nil
Rs 5,00,001 - Rs
10,00,000
20% above Rs
5,00,000
Rs 2,50,001 - Rs
5,00,000
5% above Rs
2,50,000
Above Rs 10,00,000 Rs 1,00,000 + 30%
above Rs 10,00,000
Rs 5,00,001 - Rs
7,50,000
Rs 12,500 + 10%
above Rs 5,00,000
Rs 7,50,001 - Rs
10,00,000
Rs 37,500 + 15%
above Rs 7,50,000
Rs 10,00,001 - Rs
12,50,000
Rs 75,000 + 20%
above Rs 10,00,000
Rs 12,50,001 - Rs
15,00,000
Rs 1,25,000 + 25%
above Rs 12,50,000
Above Rs 15,00,000 Rs 1,87,500 + 30%
above Rs 15,00,000