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The tax levied by the union government on income of individuals is known as
  • a)
    Personal income tax
  • b)
    Interest tax
  • c)
    Wealth tax
  • d)
    Corporation tax
Correct answer is option 'A'. Can you explain this answer?
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The tax levied by the union government on income of individuals is kno...
It is based on the principle of ability to pay. The tax levied by the union government on income of individuals is known as income tax.
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The tax levied by the union government on income of individuals is kno...
Introduction:
The tax levied by the union government on the income of individuals is known as Personal Income Tax. It is one of the major sources of revenue for the government and is collected in accordance with the Income Tax Act, 1961.

Explanation:
1. Personal Income Tax:
Personal Income Tax is a direct tax imposed on the income earned by individuals. It is a progressive tax, which means that the tax rate increases as the income increases. The tax is levied on various sources of income such as salary, wages, profits, gains from business or profession, rental income, and capital gains.

2. Imposition by Union Government:
The Personal Income Tax is levied by the union government, which is the central government of the country. The government formulates tax laws and regulations, and it is responsible for collecting taxes from individuals and businesses.

3. Income Tax Act, 1961:
The Personal Income Tax in India is governed by the Income Tax Act, 1961. This act provides the legal framework for the assessment, collection, and administration of income tax in the country. It specifies the various tax slabs, deductions, exemptions, and procedures for filing tax returns.

4. Major Source of Revenue:
Personal Income Tax is a significant source of revenue for the government. The tax collected from individuals contributes to the overall revenue pool, which is utilized for various developmental projects, infrastructure development, social welfare schemes, defense expenditure, and other government activities.

Conclusion:
In conclusion, the tax levied by the union government on the income of individuals is known as Personal Income Tax. It is an important source of revenue for the government and is collected in accordance with the provisions of the Income Tax Act, 1961. This tax helps the government in funding various public services and developmental activities in the country.
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The tax levied by the union government on income of individuals is known asa)Personal income taxb)Interest taxc)Wealth taxd)Corporation taxCorrect answer is option 'A'. Can you explain this answer?
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