An income tax is a government levy that varies based on an individual or entity's taxable income. It is imposed on income or profits. Many jurisdictions refer to income tax on businesses as corporate tax, and partnerships are not taxed directly but the partners are taxed on partnership income. Income tax is generally computed as the tax rate multiplied by taxable income, and the tax rate may increase as taxable income increases in a graduated system. Capital gains may be taxed at different rates than other income.