Tax (from the Latin taxo; "I estimate") is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many administrative divisions. Taxes consist of direct tax or indirect tax, and may be paid in money or as its labour equivalent (often but not always unpaid labour).

A tax is a "pecuniary burden laid upon individuals or property owners to support the government a payment exacted by legislative authority."A tax "is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority" and is "any contribution imposed by government whether under the name of toll, tribute, tallage, gabel, impost, duty, custom, excise, subsidy, aid, supply, or other name."

Taxation refers to the act of a taxing authority actually levying tax. Taxation as a term applies to all types of taxes, from income to gift to estate taxes. It is usually referred to as an act; any revenue collected is usually called "taxes."

Taxation can also refer to taxes as an abstract concept, a actual dollar amount of tax that has been levied or the material funds that have been received as taxes. Although all of these definitions are technically correct, the one listed above is the most common. Taxation is one of the primary powers of government over the people.

Income Tax Rates

For Individuals, Hindu Undivided Family, Association of Persons, Body of Individuals and Artificial juridical persons

Total Income Tax Rates
Up to Rs. 2,00,000(a)(b) NIL
Rs. 2,00,001 to Rs. 5,00,000 10%
Rs. 5,00,001 to Rs. 10,00,000 20%
Rs. 10,00,001 and above 30%

(a) In the case of a resident individual of the age of 60 years or above but
below 80 years, the basic exemption limit is Rs. 2,50,000.
(b) In case of a resident individual of age of 80 years or above, the basic
exemption limit is Rs. 5,00,000.
(c) Surcharge is not applicable.
(d) Education cess is applicable @ 3% on income tax.
(e) Marginal relief may be available.

Prevalence of various kinds of taxes is found in the nation. Taxes in this nation can be either of direct or indirect ones. However, the types of taxes even depend on whether a particular tax is being levied by the central or the state government or any other municipalities. Following are some of the major Indian taxes, which are categorized below:
  • Direct Taxes

    This kind of tax is named so as such a tax is directly paid to the Union Government of India. As per a survey, the Republic of India has witnessed a consistent rise in the collection of such taxes over a period of the past years. The visible growth in these tax collections as well as the rate of taxes reflects a healthy economical growth of India. Besides that, it even portrays the compliance of high tax along with better administration of taxation. To name a few of the direct taxes, which are imposed by the India Government are:

    • Banking Cash Transaction Tax
    • Corporate Tax
    • Capital Gains Tax
    • Double Tax Avoidance Treaty
    • Fringe Benefit Tax
    • Securities Transaction Tax
    • Personal Income Tax
    • Tax Incentives

  • As opposed to the direct taxes, such a tax in the nation is generally levied on some specified services or some particular goods. An indirect tax is not levied on any particular organisation or an individual. Almost all the activities, which fall within the periphery of the indirect taxation, are included in the range starting from manufacturing goods and delivery of services to those that are meant for consumption. Apart from these, the varied activities and services, which are related to import, trading etc. are even included within this range. This wide range results in the involvement as well as implementation of some or other indirect tax in all lines of business.

    Usually, the indirect taxation in the Indian Republic is a complex procedure that involves laws and regulations, which are interconnected to each other. These taxation regulations even include some laws that are specific to some of the states of the country. The regime of indirect taxation encompasses different kinds of taxes. The organizations offer services in all or most of the related fields, some of which are as follows:

    • Anti Dumping Duty
    • Custom Duty
    • Excise Duty
    • Sales Tax
    • Service Tax
    • Value Added Tax or V. A. T.

  • Besides the taxes, the names of which are mentioned earlier, the nation has got the prevalence of many other taxes. Listed below are some of those Indian taxes:

    • Consumption Tax
    • Death Tax
    • Dividend Tax
    • Endowment Tax
    • Estate Tax
    • Flat Tax, which is even known as the Flat Rate Tax
    • Fuel Tax
    • Gift Tax
    • Inheritance Tax
    • Sales Tax (Solely on goods that do not include payment of sales tax on services)
    • S. E. T. or Self Employment Tax
    • Social Security Tax
    • Transfer Tax
    • Payroll Tax
    • Poll Tax
    • Property Tax
    • Wealth Tax
Requirement of a Good Tax Structure / System

The tax structure is a part of economic organisation of a society and therefore fit in its overall economic environment. No tax system that does not satisfy these basic condition can be termed a good one.

However, the state should pursue mainly following principles in structuring its tax system :

  • The primary aim of the tax should be to raise revenue for public services.
  • People should be asked to pay taxes according to their ability to pay and assessment of their taxable capacity should be made primarily on the basis of income and property.
  • Tax should not be discriminatory in any aspect between individuals and also between various groups.

comments powered by Disqus