Section 4 of Income tax act is the most effective and operative of the various provisions in the Act since, it is because of this section alone all other sections become enforceable. The charging section is the backbone of the act, it lays down the provisions as to what are taxable and at what rates; income of which period is taxable and in whose hands. Accordingly, the section provides that :
a) Income tax shall be charged at the rate or rates prescribed in the finance act for the relevent previous year,
b) the charge of tax is on various persons specified u/s 2(31);
c) the income sought to be taxed is that of the previous year and not of the of assessment year
d) the levy of tax on the assessee is on his total or taxable income computed in accordance with and subject to the appropriate provisions of the income tax Act, including provisions for the levy of additional income-tax.
For the purpose of making an assessment, the generel rule is that the income of the previous year alone should be taxed in the immediately following assessment.
However there are five exception to this rule :
a) Assessment of non-residents in respect of their income from shipping business (Section 172)
b) Assessment of persons leaving India (Section 174)
c) Assessment of association of persons or body of individuals or artificial judicial person formed for a particular event or purpose (Section 174A)
d) Assessment of persons trying to alienate their assets with the object of avoiding liability to tax (Section 175)
e) Assessment of the income from discontinued business (Section 176)
SECTION 4 - CHARGE OF INCOME TAX 
