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Q1. What is Income Tax? Describe the history of Income Tax in India. (14 Marks) Meaning of Income Tax: Income tax is a direct tax that the government imposes on the income of individuals, Hindu Undivided Families (HUFs), companies, firms, and other entities . It means that when a person earns income, a certain percentage of that income is paid to the government as tax. In simple words, income tax is the money paid by citizens and organizations to the government from their income so that the government can use it for public welfare — like building roads, schools, hospitals, defense, and other social services. Under Indian law, income tax is governed by the Income Tax Act, 1961 , which is applicable all over India. Features of Income Tax: Direct Tax: Paid directly by the person who earns income. Progressive Nature: Higher income → Higher tax rate. Annual Levy: Tax is charged every financial year on the income earned during that year. Legal Obligation: It is compulso...