Income tax is a type of tax that is imposed by the government on individuals, businesses, and other entities based on their income or profits earned during a particular financial year. It is a direct tax that is levied on the income earned by a person or organization and is usually calculated as a percentage of their total income.
For example,
Suppose Mr. A earns a total income of $50,000 in a financial year. The income tax rate applicable to his income bracket is 20%. So, he would have to pay $10,000 as income tax to the government.
