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CS Executive · Tax Laws and Practice · Basic Concept of Income Tax

Under the Income-tax Act, 2025 (applicable from the June 2027 session), section 4 provides that the charge of income-tax is on which of the following?

Under section 4(2) of the Income-tax Act, 2025, income-tax is charged on the total income of the tax year of every person. It is not charged merely on gross receipts or only on income received in India, and the Act uses the tax year concept.

  1. AThe total income of the tax year of every personCorrect
  2. BOnly the gross receipts of a person during the tax year
  3. COnly the income actually received in India in the tax year
  4. DThe total income of the preceding year of every resident

Explanation

Section 4(2) states that the charge of income-tax is on the total income of the tax year of every person as per the Act. The charge is not limited to gross receipts or to cash received in India. The reference to a preceding year belongs to the old framework and is not the basis of charge under the 2025 Act.

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