The Tax structure or provisions since Independence in 1947 have been simplified to a large extent and making it more easier for the tax payer to understand. Every year in the budget a new finance bill is introduced with the income tax slab rates. The tax rates have been reduced to current rate of 30% on the maximum side.

The maximum rate for personal income tax is 30%, and the corporate tax rate is 35% for Indian companies and 40% for foreign companies. All firms are subject to a 10% tax on distributed profits. Customs duties have been sharply lowered, but remain high by international standards. Increased reliance on direct taxes is likely over the forecast period.
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Every individual or an artificial body in the eyes of law earning an income, if it is more than the exempted limit of annual income prescribed in the tax rates or structure. The current exempted limit of gross total income from income tax is Rs 50,000/-. An income crossing the limit falls in the category of tax rates falling under the tax rates prescribed. It is mandatory for the individual to file his returns and computation of taxable statement with the Income Tax Authority of India.

Here's a quick overview of the Income tax Equation:

• Calculate the Gross total income deriving from all sources
• Subtract all the deductions and exemptions available ( u/s 10,24b,16,80 )
• Applying the tax rates on the Taxable Income
• Ascertain the tax liability
• Minimizing the tax liability through a perfect tax planning using Tax Saving Schemes