Which annual Act generally sets the rates of income-tax for the relevant tax year?
Question and options
Which annual Act generally sets the rates of income-tax for the relevant tax year?
Income-tax Rules notified by the CBDT
Appropriation Act
Finance Act
Central Boards of Revenue Act
Answer and explanation
Correct answer: C - Finance Act
Section 4(1) of the Income-tax Act, 2025 charges income-tax at the rates enacted by a Central Act for the tax year, which is the annual Finance Act; the Income-tax Act itself fixes certain special rates. The Appropriation Act, passed with the budget, authorises spending from the Consolidated Fund and does not levy tax.
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