Charge of Income-tax :

Section 4 of the Income-tax Act, 1961 is the charging section which provides that:

(i) Tax shall be charged at the rates prescribed for the year by the annual Finance Act.

(ii) The charge is on every person specified under section 2(31);

(iii) Tax is chargeable on the total income earned during the previous year and not the assessment year. (There are certain exceptions provided by sections 172, 174, 174A, 175 and 176);

(iv) Tax shall be levied in accordance with and subject to the various provisions contained in the Act. This section is the back bone of the law of income-tax in so far as it serves as the most operative provision of the Act. The tax liability of a person springs from this section.