What is Income act of 1961?

The Income Tax Act of 1961 is an act of the Parliament of India that governs the taxation of income earned by individuals, businesses, and other entities in India. The act was first introduced in 1961 and has since undergone several amendments and updates.

The Income Tax Act of 1961 provides a framework for the assessment and collection of income tax in India. The act outlines the rules and procedures for the computation, assessment, and collection of income tax, as well as the penalties for non-compliance.

The act defines various types of income that are subject to tax, including income from salaries, business or profession, capital gains, and income from other sources. The act also provides for various deductions and exemptions that may be claimed by taxpayers to reduce their taxable income.

In addition, the Income Tax Act of 1961 outlines the procedures for filing income tax returns, the penalties for late or non-filing of returns, and the procedures for conducting tax audits and assessments.

The act also provides for the establishment of the Income Tax Department, which is responsible for administering and enforcing the provisions of the act. The Income Tax Department is responsible for collecting and processing income tax returns, conducting audits, and taking legal action against non-compliant taxpayers.

Overall, the Income Tax Act of 1961 is a crucial piece of legislation that governs the taxation of income in India and provides the framework for the assessment and collection of income tax in the country.