INCOME TAX · BASICS FOR BEGINNERS

Income Tax Explained Simply: Who Pays It and Why

Understand taxable income, TDS, deductions, rebates and returns through an everyday salary example.

By Vyapar Setu Online | Basics for beginners · 26 October 2026

Income Tax learning series · Basics for beginners · Article 1 of 27

Your salary slip shows tax deducted, your bank deducts TDS, and someone says you should file a return. These are connected parts of one process: calculating your annual income tax and checking how much has already been paid.

Year guide: Numerical limits, examples and familiar section numbers in this article refer to FY 2025–26 / AY 2026–27 under the Income-tax Act, 1961, unless stated otherwise. Income from 1 April 2026 belongs to Tax Year 2026–27 under the Income-tax Act, 2025, with corresponding provisions and numbering. Check the year before applying a rule. Official transition guidance.

For learning and preparation. Verify the rules and official guidance for your period and circumstances before making a filing or tax decision.