Indian income-tax law | Updated October 2026
Section 4 of the Income Tax Act: Charge of Income Tax
Section 4 is the charging provision of Indian income-tax law. It establishes when income-tax is imposed, whose income is chargeable and how tax is collected. The Income-tax Act, 2025 applies from 1 April 2026, while the 1961 Act remains relevant to earlier periods under transitional provisions.
Section 4 under the Income-tax Act, 2025
The updated Section 4 has five subsections:
- Section 4(1): A Central Act sets the applicable rate or rates for a tax year; tax is charged in accordance with the 2025 Act.
- Section 4(2): The charge applies to the total income of the tax year of every person, subject to the Act.
- Section 4(3): Income-tax includes additional income-tax, by whatever name called, levied under the Act.
- Section 4(4): A different income period may be charged where the Act specifically provides.
- Section 4(5): Tax may be deducted or collected at source or paid in advance as required by the Act.
See the official consolidated Income-tax Act, 2025 (as amended by Finance Act, 2026) and the Income Tax Department's 2025 Act resource centre.
Section 4 of the Income-tax Act, 1961: Original provisions
The following is a readable presentation of the statutory provision retained from the original page, without obsolete footnote markers:
Section 4(1). Where any Central Act enacts that income-tax shall be charged for any assessment year at any rate or rates, income-tax at that rate or those rates shall be charged for that year in accordance with, and subject to the provisions (including provisions for the levy of additional income-tax) of, this Act in respect of the total income of the previous year of every person.
Proviso. Where any provision of the Act requires income-tax to be charged in respect of income of a period other than the previous year, income-tax shall be charged accordingly.
Section 4(2). In respect of income chargeable under sub-section (1), income-tax shall be deducted at source or paid in advance, where so required by the Act.
Legislative history: The original page notes that Act 4 of 1988, Section 5, substituted the wording concerning provisions of the Act and omitted the words "or previous years, as the case may be", with effect from 1 April 1989. Consult the Income Tax Department's historical Section 4 text for statutory context.
Meaning of important terms
Charge of income-tax
The legal authority to impose income-tax on a person's taxable total income. The charging provision operates with the applicable rate legislation and the remaining provisions of the Act.
Total income
Income computed under the relevant Act after applying applicable inclusions, exclusions, deductions and special provisions. It is not necessarily the same as gross receipts or salary.
Tax year and assessment year
The 2025 Act uses the term tax year for the financial period to which income relates. The 1961 Act used previous year for the income period and assessment year for the following year. The tax-year concept applies from 1 April 2026.
TDS, TCS and advance tax
Tax deducted at source (TDS), tax collected at source (TCS) and advance tax are mechanisms for collecting tax under the applicable statutory rules. They are not separate charges merely because Section 4 refers to them.
Practical example
For income earned during 1 April 2026 to 31 March 2027, the relevant period is Tax Year 2026-27 under the 2025 Act. Income-tax is calculated using the applicable provisions and rates, after considering deductions, exemptions and special rules. Any valid TDS, TCS or advance-tax payments are accounted for in determining the final tax payable or refund.
Does Section 4 fix tax rates?
No. Section 4 provides the charging framework. Rates depend on the relevant Central Act and the applicable provisions for the taxpayer and category of income. Special-rate provisions may apply to particular income, and the taxpayer's applicable regime also matters.
Official legal resources
- Income-tax Act, 2025 and transition guidance
- Income Tax Department: objectives and scope of the new Act
- Historical Section 4 of the Income-tax Act, 1961
Frequently asked questions
What is Section 4 of the Income-tax Act?
It is the charging provision that provides the legal basis for levying income-tax, subject to the rates enacted by Parliament and the other provisions of the applicable Act.
Does Section 4 itself specify income-tax slab rates?
No. The applicable rates come from the relevant Central Act and other applicable provisions, including special tax regimes.
What changed from 1 April 2026?
The Income-tax Act, 2025 uses the concept of a tax year rather than the earlier previous-year and assessment-year terminology. Section 4 continues as the charging provision.
Does the 1961 Act still matter?
Yes. Repeal and savings provisions preserve its relevance for earlier periods and proceedings.
This article is general legal information. For a particular tax year or proceeding, check the operative statutory text, amendments and notifications.