Income Tax is chargeable on the total income of every person for any previous year at the rates, prescribed by the Finance Act for that year. The term, "person" for the purpose of the Income-Tax Act, 1961, includes the following:

• an individual;
• a Hindu Undivided Family;
• a Company;
• a Firm;
• an association of Persons (AOP) or a Body of Individuals (BOI), whether incorporated or not;
• a local Authority;
• every other artificial juridical person.

The term, "previous year" means any financial year preceding the assessment year. This implies that income tax is chargeable on income, earned in any year and, is not concerned with any future earnings.

Secondly, those incomes in respect of which the Income-Tax Act, 1961, will also be chargeable to income-tax.

Lastly, those incomes, which are subject to income-tax for any period other than the previous year, specifically, provided for under the Income-Tax Act, 1961, will also be chargeable to Income-Tax.