Income taxes are calculated based on income. The tax authority takes a portion of your income, in the form of a tax.
Income tax is a direct tax that a government levies on the income of its citizens. The Income Tax Act, 1961, mandates that the central government collect this tax. The government can change the income slabs and tax rates every year in its Union Budget. Income does not only mean money earned in the form of salary.
While federal tax rates apply to every taxpayer, state income taxes vary by state. Some states have a flat tax rate, marginal tax rate, or don’t have any state taxes at all.