Income tax basics

Income tax & its relevant provisions are being tougher for common persons who are un-aware of income tax rules, acts & provisions. In such a situation it is tricky to compute the liability of tax, themselves.
An effort is here, towards solving such the difficult calculations in tax computation.
Who r u?
The first quest you will face while calculating Tax liability. This is referred to the concept of 'Assessee'. An assessee could be Individual, Company, Firm, Artificial or Juridical Person, BOI or Trust.
Categorize yourself where you will stand & proceed accordingly.
What is your Annual Income?
Though an easy question, it is little complex to answer.
The act (here after referred to Income Tax act) has been divided the sources of incomes on five grounds, called 'Heads of Income'. They are Salaries, House Property, Business or Profession, Capital Gains & Other Sources.
Identify the source of Income compute the tax.
Year of Chargeability:
It is a general rule. The income of current year is taxable in next year. Current year is referred to Previous Year & next year is Assessment Year.
Payment of Tax:
As per the provisions of the act, tax should be computed & paid before filing the Return of income.
Importance of Due date:
Section 139(1) of the Act deals with above area. This section speaks about the due date(s) for filing the Return of Income by the assessee.
In case of Individual 31st of July every year (Assessment year) is due date for submitting ROI (Return of Income.)
If returns are submitted belatedly, attracts interest, at the rates specified by the act for relevant Assessment years.
What is PAN?
PAN stands for Permanent Account Number. It is mandatory to quote PAN by every assessee, who files the ROI.
Section 139(A) speaks about PAN & the circumstances wherever the PAN to be quoted by the Assessee, other than filing ROI.
Tax Rates:
The tax is calculated on the total income of the assessee as per the rates specified the relevant Finance Act for the relevant Assessment Year.
The rate also differs from year to year & assessee to assessee.
Tax Rates for Individual - Assessment Year 2008-09:
Tax for the Assessment year 2008-09 (Previous Year 2007-08) is calculated as per the rates mentioned below.
For individuals who's income above taxable limit