Direct tax is levied by Central government on the income of its citizens. Income act 1961 gives the authority to government to collect income tax/taxes.
To promote economy and development Govt. provides for various exemptions, reliefs and deductions under various sections of Income Tax Act.
Income Tax return forms are made available for different type of incomes.
Income TAX SLABS are specified with rates at which tax is to be paid by each legal entity and are amended every year after announcements in Financial Budget by the Finance Minister.
"Income tax return gives you a detailed picture of your total income earned during a year and taxes paid on it. ...
In fact, you must ideally file your return so that you can carry forward the losses you have incurred to set it off against the income of the subsequent years."