Income tax is a tax imposed by governments on the earnings of individuals and businesses.
For businesses, it is calculated based on net profit (total revenue minus allowable expenses, deductions, and exemptions). The tax is typically paid annually, though some businesses make quarterly payments. Income tax rates can vary depending on the size, structure, and location of the business, and may be flat or progressive.
The funds collected help finance public services such as infrastructure, education, and healthcare.
Filing accurate income tax returns is a legal requirement, and failure to comply can result in penalties, interest charges, or legal action from tax authorities.