A tax is a compulsory financial charge that is levied on persons earning income within a country. This charge is collected by the government for funding various public expenditures. It is believed that the government uses these taxes for the greater good of society. If a taxpayer fails to pay the taxes or tries to resist it, this act is considered as punishable crime. Taxes can increase or decrease prices of any goods and services according to fiscal policy (Fisacal policy is basically the taxes collected by the government to take care of the expenses for the coming financial year.)
Tax structures, in India, are decided by both the Union as well as State Governments. Municipal authorities can also impose marginal taxes. However, any tax imposed by the Government must follow the Constitutional principle of “No Taxation without Representation”.
Taxes can be classified into two main categories: Direct tax and Indirect tax. These taxes differ in their mode of implementation. Taxes that are paid directly by any individual or collected for a property fall under the category of direct tax. On the other hand, taxes that are collected or deducted indirectly by the government are called indirect taxes. Other than these two major taxes, there are various taxes which were recently introduced, ‘Swachh Bharat Cess’, ‘Infrastructure Cess’, and the ‘Krishi Kalyan Cess’ are among the minor taxes paid by the citizens.
Here are some Advantages of Tax: -
Tax that is imposed on an individual or a property, which is different from the tax levied on a transaction is called the direct tax. The different types of taxes that fall under this category are Income Tax, Corporate Tax, Wealth Tax (Which is now abolished) etc.
Here is a detailed information about the various taxes taxes that fall under direct tax category: -
Income tax is one of the most common as well as important type of tax paid by an individual or a company for their income. It is directly charged to the payer and the at which it is charged varies every year depending on the annual income of the taxpayer.
It is charged to the companies, individuals, firms, co-operative societies, Hindu Undivided Families etc. This is tax which is imposed on the taxable income.
Income tax is chargeable on the income from various sources like house, property, business, capital gains etc. It differs on the basis of the taxpayer’s residency status.
This tax is imposed on the companies that run solo as separate entities from their shareholders. Foreign companies are taxed on the income that the gather from India. It is charged on royalties, interests, sale of assets in India. Corporate tax also includes Minimum Alternative Tax(MAT), this tax was introduced to bring zero tax companies under the umbrella of Income tax. It also includes Fringe Benefit Tax(FBT) which focuses on the minor benefits company gives to its employees. Dividend distribution Tax also falls under corporate tax as it is the tax levied on any amount paid as dividend by a domestic company. It includes Securities Transaction Tax(STT) which is levied on the on the taxable securities transaction.
This is a tax which is levied on the jewellery, property, land meant for guest house etc…This Tax was applicable till 2015, In Union Budget 2016-2017, The Union Finance Minister Mr. Arun Jaitely declared the abolition of wealth tax.
This tax is levied on the income that is gained by selling assets or investments. Capital investments can be in the form of house, business, jewellery, land, works of art etc. It can be categorised as short-term gains (income from the sale of assets within 36months of acquisition) and long-term gains (income from the sale of assets after 36months of acquisition). It is the tax paid by the taxpayer once the property is sold.
The penalty depends on the tax type you avoid to pay and it can be either cash or imprisonment or both. Sometimes the penalty amount is the total payable tax and interest charged on that amount.
This information is provided to you in the public interest courtesy of AllIndiaITR
The Economic Times Wealth: Vikas Dahiya, founder and chief of tax compliance platform, All India ITR announced a free of cost tax returns solution for members of the Indian Armed Forces. Due to their disciplined schedules, annual tax returns become a hectic chore for servicemen. They need to repaid for their services to millions of citizens and this initiative will go a long way to alleviate the stresses in their service conditions.
18th July 2017
THE ECONOMIC TIMES
Gadgets Now: Technology firms are gearing up to meet tax compliance deadlines with great fervour. All India ITR, an online tax compliance firm launched its e-filing app that works on both Android and iOS.
14th June 2017