The exempted income from Income Tax are:
(i) Agriculture Income (Sec.10 (i)).
(ii) Payment received from family income by member of HUE
(iii) House Rent allowance subject to certain limit (lO(B/A)).
(iv) Any amount from Provident Fund paid to retiring employees (10(11)).
(v) Scholarship granted to meet the cost of education.
(vi) Family pension received by family member of armed forces.
(vii) Interest from certain exempted securities (10(15)).

Income tax is administered by the Central Government (Ministry of Finance) with the help of 'Income tax department' with branches throughout the country. The Central Government has constituted the 'Central Board of Direct Taxes' (CBDT) which exercises overall control over the Income tax department by issuing guidelines for related matters.

According to Section (3) of Income Tax Act 1961, "The year in which income is earned is called previous year". It is also normally consisting of a period of 12 months commencing on 1st April every year and ending on 31st March of the following year. It is also called as financial year immediately following the assessment year.

The following tax rates have been prescribed under Income Tax Act.
1. Tax on long term capital gain @ 20% (Section 112).
2. Tax on short term capital gain on shares covered under STT @15% (Section 111A).
3. Tax on lottery income @ 30% (Section 115BB)

Income tax is an annual tax because it is the income of a particular year which is chargeable to tax.

(i) The central Government constituted the Central Board of Direct Taxes.
(ii) In India all direct taxes are levied and administered by central Board of direct taxes.
(iii) Income-tax is administered by the Central Government (Ministry of finance) with the help of income tax department.

There are two types of taxes direct taxes and indirect taxes,
(i) Direct Tax:
(1) If a tax levied on the income or wealth of a person and is paid by that person or his office directly to the Government, it is called direct tax.
(2) E.g: Income tax, wealth tax, capital gain tax, etc.
(ii) Indirect Tax:
(1) If tax is levied on the goods or services of a person (seller), it is collected from the buyers and is paid by seller to the Government, it is called indirect tax.
(2) E.g. GST

These five heads are :
(i) Income from salaries (sections 15-17) 
(ii) Income from House Property (sections 22-27)
(iii) Income from 'Profits and gains of Business or Profession' (sections 28-44)
(iv) Income from capital gains (section 45-55) and
(v) Income from other sources (section 56-59)

Income aggregated after adjusting past and present losses and the total so arrived at is known as 'Gross Total Income'.