Income Tax is a government levy imposed on the earnings of individuals and businesses. It is calculated based on the amount of money earned within a specific period, usually a year. The tax rate can vary depending on income levels, with higher earners typically paying a larger percentage. Governments use the revenue generated from Income Tax to fund public services such as education, healthcare, and infrastructure. Taxpayers are required to file their returns annually, reporting their income and any deductions or credits they may qualify for, which can reduce their overall tax liability.