There are two types of income tax - direct tax and the newly launched Goods and Services Tax (GST) which subsumed all other indirect taxes such as VAT, service tax, excise etc.
Income tax collected by government is not only used for various government schemes but also acts as a fiscal stabiliser that aid in distributing wealth evenly among the population.
According to the Income Tax Act of India, income from the following sources is considered taxable:
1) Income from salary 2) Income from house property 3) Income from profits and gains of business or profession 4) Income from capital gains 5) Income from other sources
The tax rates in India vary according to the earning of an individual, also known as Income Tax Slab. The government revises Income Tax Slab every year during Budget Session of Parliament. The Budget 2018 would be the first post-GST Budget and the current government's last full Budget. The Budget may be presented on February 1, 2018.