Income Tax Department

Income Tax Department – The Income Tax Department is the government authority responsible for administering and enforcing the income tax laws in a country. Its key functions include collecting taxes, processing tax returns, conducting audits, and ensuring compliance with tax regulations. The department also provides guidance to taxpayers, issues notices, and facilitates refunds. In India, the assessment and taxation of income earned during a Financial Year (FY) is carried out in the corresponding Assessment Year (AY). Taxpayers must file their Income Tax Returns (ITR) and pay the required taxes during the Assessment Year.

Example: Income earned between 1 April 2022 and 31 March 2023 (FY 2022–23) is assessed and taxed in AY 2023–24 by the Income Tax Department.