1. Income Tax Act, 1961 1.1 Introduction to the Income Tax Act The Income Tax Act of 1961 is a pivotal piece of legislation in India that governs the taxation of income for individuals, businesses, and other entities. Enacted to streamline the tax system and provide a uniform basis for taxation, it plays a crucial role in the Indian economy by ensuring the collection of tax revenues necessary for public services and development. 1.2 Historical Context of the Income Tax Act Before the Income Tax Act of 1961, India had various tax laws that were fragmented and inconsistent. The Income Tax Act was introduced to consolidate and simplify these laws, replacing the Income Tax Act of 1922. It aimed to modernize the tax regime in response to India's evolving economic landscape post-independence. 1.3 Key Provisions of the Income Tax Act Definition of Taxable Income : The Act defines various sources of income, including salary, business profits, capital gains, and other earnings. It specif...