Section 4 of the Income Tax Act, 1961 provides for the charge of income tax on the total income of a taxpayer. It lays down the scope of taxable income which includes all income from whatever source derived, subject to specific exemptions and deductions. Essentially, this section establishes that income tax shall be charged on the total income of the previous year of every person at the rates enacted by the Central government for that assessment year. Key points of Section 4:

• It charges income tax on the total income of a previous year.
• The tax is levied at rates prescribed by the Central government.
• Total income includes income from all sources, after deductions under Chapter VI-A.
• The section also mandates tax deduction at source (TDS) and advance tax payments where applicable.
• It is a foundational provision that determines the liability of a taxpayer to pay income tax in India.

This section is crucial in defining the basis on which income tax is levied and collected in India.