<P> Central Revenue collections in 2007 - 08 (Source: Compiled from reports of Comptroller and Auditor General of India for relevant years) </P> <P> The Constitution of India → Schedule VII → Union List → Entry 82 has given the power to the Central Government to levy a tax on any income other than agricultural income, which is defined in Section 10 (1) of the Income Tax Act, 1961 . The Income Tax Law consists of Income Tax Act 1961, Income Tax Rules 1962, Notifications and Circulars issued by Central Board of Direct Taxes (CBDT), Annual Finance Acts and judicial pronouncements by the Supreme Court and High Courts . </P> <P> The government imposes a tax on taxable income of all persons who are individuals, Hindu Undivided Families (HUF's), companies, firms, LLP, association of persons, body of individuals, local authority and any other artificial juridical person . Levy of tax on a person depends upon his residential status . The CBDT administers the Income Tax Department, which is a part of the Department of Revenue under the Ministry of Finance, Govt. of India . Income tax is a key source of funds that the government uses to fund its activities and serve the public . </P> <P> The Income Tax Department is the biggest revenue mobilizer for the Government . The total tax revenues of the Central Government increased from ₹ 1,392.26 billion (US $22 billion) in 1997 - 98 to ₹ 5,889.09 billion (US $92 billion) in 2007 - 08 . </P>

Who needs to pay income tax in india