o 5% between INR 2.5 lakhs to INR 5 lakhs
o 10%, 15%, 20% and so on. The top one is 30% for the highest income brackets.
So, for each slab of tax, it is an additive combination: that slab imposes tax on only the part of
income falling within the bracket of that slab. Most tax systems also feature provisions for deduction
and exemption whereby tax liability reduces taxable income through either actual reduction or
through exemptions.
The rules of income tax group income into different classes and decide under what principles
different types can be taxed in respect of their source and their nature.