In India Income Tax is an annual tax both in its imposition and structure, each previous year being a separate unit. Income and loss in the previous year are irrelevant unless they come under the special provisions concerning the carry forward of business loss, capital loss or similar provisions.
Tax is on total income of an entity and it also depends upon whether the tax payer is resident in India or not. Relatively very lengthy and complicated the Income Tax Act, 1961 converse almost all the aspects of levying and recovery of tax and every year additions are being made therein and provisions are being altered. A significant head of tax under the Indian Income Tax is the capital gains tax and is termed as short term capital gains and long term capital gains. Any profits or gains arrived from the capital assets are chargeable with tax under this head.
In addition to the Income Tax, Gift Tax, Wealth Tax, Sales Tax, State Sales Tax, etc. are the other modes of revenue for Centre and State.