Section 4 of the Income-tax Act, 1961 is the charging section, which means it is the fundamental provision that creates the liability to pay income tax in India. Unless there is a charging section, no tax can be levied. This section lays down who is liable, on what income, and for which period.

Legal Authority to Levy Tax

Section 4 establishes the foundational legal authority for income-tax: whenever a Central Act specifies that income-tax is to be charged for any tax year, that charge becomes enforceable under this Act.

Person-wise Charge on Total Income

The charge applies to the total income of every person for that tax year, as computed under the provisions of the Act.

• “Person” here refers broadly—individuals, companies, firms, associations, etc., as defined elsewhere in the Act.
• “Total income” encompasses income across all heads (salaries, business or profession, capital gains, house property, other sources) as per the rules laid out in the Act.

Inclusion of Additional Income-tax

The term “income-tax” in this section is inclusive of any additional income-tax imposed under the Act, regardless of the nomenclature used. This means levies like surcharge, cess, or any specific additional tax are part of the chargeable tax under this section.

Alignment with Constitutional Mandate

Section 4 embodies the principle in Article 265 of the Constitution, which mandates that taxes can only be levied by an authority created by law. Thus, this section is the statutory anchor giving the Central Government power to impose income-tax.

Core Role in the Tax System

This section can be considered the “backbone” of the income-tax framework. Without it, there would be no statutory basis for determining tax liability or collection.

Conclusion

Section 4 is essential in establishing who is taxed, on what basis, and with what scope (including additional levies). It ensures that any liability for income tax must stem from a lawful provision passed by Parliament. The revamped Income-Tax Act, 2025 preserves this core section precisely because of its central importance to the tax system.